Escalating Iran Conflict Drives Risk-Off Sentiment Across Global Markets

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3530-1.3780

Euro                1.5770-1.6020

Sterling           1.8150-1.8400

WTI Oil (opening level) $74.82

The CAD/USD is opening at 1.3663 ( 0.7319 )

USD/CAD trades around 1.366's.

The near-term bias is neutral with a slight downside tilt as the pair eases from the 1.4000 area and loses altitude from recent highs while still holding well above the rising 200-week EMA near 1.3600.

Initial resistance emerges at 1.3730. On the downside, immediate support is at 1.3615, just above the 200-week EMA, with a break exposing the next cushion at 1.3550 and then 1.3450. A weekly close above 1.3730 would revive bullish momentum toward 1.3915, while sustained trading below 1.3615 would strengthen the corrective tone and open a deeper pullback toward the mid-1.34s.

Headlines

• The US-Israel war with Iran enters its fifth day. Trump stated that Iran's military capabilities are severely reduced, and promised to insure shipping through the Strait of Hormuz with US Naval escorts, though the practicability of this idea was questioned. The US Senate plans to vote on the Iran war powers resolution. Iran targeted Al Udeid base in Qatar and threatened regional economic centers, while their new defense minister was reportedly killed. Israel struck Iranian leadership in Tehran, and tensions with Hezbollah are rising. The UAE is considering military action against Iran's missile and drone strikes.
• Australia's economy grew 0.8% in Q4 2025, up from 0.5% in Q3, beating the 0.6% forecast and marking the 17th consecutive quarterly growth. Annual GDP increased 2.6%, surpassing the 2.2% expectation and was the fastest since Q1 2023.
• UK Finance Minister Rachel Reeves presented the Spring Statement, updating on growth and finances amid Middle East uncertainties. The OBR forecasted 2026 growth at 1.1%, down from 1.4%, with future years raised to 1.6%. Despite inflation challenges, defense spending and infrastructure investment were emphasized. The government targets meeting fiscal rules by 2029/2030 with £23.6 billion borrowing headroom, prioritizing the Autumn Budget for major policies.
• Euro Area annual inflation rose to 1.9% in February 2026, up from 1.7% in January and exceeding expectations. Services inflation accelerated to 3.4%, and non-energy industrial goods inflation rose to 0.7%. Energy prices continued to decline but at a slower rate, down 3.2%. Core inflation rebounded to 2.4%. Among major economies, HICP rose in France, Spain, and Italy, while slightly easing in Germany.

Key Points

• Equities: Risk-off hit equities as energy shock fears rose, with Europe sliding most, while US and Asia also retreated.
• Volatility: Iran escalation, oil above $82, elevated hedging, downside skew
• Digital Assets: Bitcoin steady, IBIT inflows, macro sensitivity
• Fixed Income: US Treasury yield spike moderates. High yield bonds under pressure
• Currencies: US dollar strength eased Tuesday. EM currencies steady after Tuesday drubbing.
• Commodities: Oil pulling back higher after rally capped Tuesday. Precious metals steady after steep Tuesday sell-off