News for residents of the “11th province”: Canadians abroad.
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Iran Enters the Portfolio Chat
Canadian investors have another issue that might require some attention in their portfolios this week. The Financial Post says the Middle Eastern conflict involving Iran is starting to affect bond markets, capital flows and, perhaps most importantly for most regular folks, borrowing costs.
The capital flows story has changed quite a bit over the past 18 months. Middle Eastern capital that was once recycled into global markets is now being used instead for domestic spending, security expenses and infrastructure. Against that backdrop, AI companies are vacuuming up enormous amounts of debt funding, and the U.S. government has about US$9 trillion in Treasuries maturing (and therefore needing to be rolledover) in less than one year.
The current environment gives bond buyers both the opportunity to demand, and the expectation to receive, higher yields.
Read more: Financial Post
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Countertariffs Coming on Tuesday
Canada's next round of countertariffs is scheduled to come into force at 12:01 a.m. on Tuesday, September 8, unless there is some sort of a last-minute deal with Washington.
The new duties are intended to match Trump's 50 per cent tariffs on $27.6 billion of Canadian goods. The list of Canada’s taxed items cover $27.6 billion of U.S. imports, with steel, aluminum, dairy, appliances, farm equipment, pulp and paper, plastics, electronics, honey, hair products, metal furniture, cardboard boxes and a bunch of other specific customs-code material in the mix.
The changes will raise Canada's effective tariff rate on U.S. imports to 3.8 per cent, which is the highest we’ve seen since the 1980s. It seems clear that Ottawa has tailored its efforts to direct much of the pain toward swing including Ohio, Pennsylvania, Michigan and Wisconsin.
Read more: Government of Canada / The Globe and Mail