• Meanwhile in markets, you break it, you buy it. US allies have effectively told Washington no thanks on requests to help reopen the Strait of Hormuz;

• Reports suggest President Trump was furious that NATO and key Asian allies were not willing to come to his aid. Luckily – for those in our neck of the woods – flipping the tariff switch is no longer as easy as it once was. Given that Trump threatened tariffs in January against NATO allies that sent troops to Greenland, he may well be missing his favorite tool today;

• Look, tariffs are not gone. A 10 percent global baseline tariff remains in place, and the administration has also opened investigations that could raise rates on a country-specific basis. But tariffs imposed under IEEPA – the punitive country-specific measures that rattled markets in April 2025 – have been stripped from Trump’s playbook by the Supreme Court;

• Moving to broader market commentary, Brent crude is holding just above the $100 a barrel mark. US Treasury yields are down 2bps across the curve, while Bund futures are firmer on the day. In equities, it is all green on the screen, with S&P 500 futures up half a percent and Stoxx 50 futures up nearly one percent for the day;

• Looking ahead, we have the release of US February PPI inflation data. But the main events today are the interest rate decisions from the FOMC and the Bank of Canada – both are expected to leave rates unchanged;

• The FOMC is likely to be uneventful, with Chairman Powell showing little appetite for action in the final months of his term – which could be extended as the DOJ continues its probe into him. Inflation was already high enough to keep the Fed on hold in January, and with surging gas prices now in the mix, there’s little motivation to ease policy to support the labor market. Fed funds futures now just barely price-in one cut by year-end at 28bps. And no, that isn’t the emergency rate cut President Trump has been pleading for on Truth Social;

•  Over in Canada, inflation worries are front and center. Core inflation remains north of two percent and Iranflation threatens to push it up even further. Despite the mixed signals still coming from the labor market following the recent cutting cycle, CORRA futures now point to a hike as the next move, with one 25bp hike priced in by year-end.

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