There was renewed uncertainty towards the potential length of the conflict in the Middle East after Iran performed retaliatory strikes, while vowing to increase its retaliatory measures. The US struck an Iranian warship in the Indian Ocean, while Iran said it struck an oil tanker in the Persian Gulf. The rising tensions have created financial and commodity market uncertainty this week. The price of oil has increased sharply, which has put upward pressure on gasoline prices in Canada.

• The conflict in the Middle East entered its sixth day yesterday. Comments and actions from both sides seem to suggest the war is intensifying. The timetable for the end of the conflict remains uncertain, leaving investors to worry about how the conflict may impact oil markets, global economic activity and inflation.
• The price of oil has risen about 19% this week. This has put upward pressure on gasoline prices in Canada. Across the country, Canadians are seeing much higher prices at the gas pumps, and more increases are likely.
• Will Canada be involved in the US and Israel’s conflict with Iran? Prime Minister Mark Carney did not rule out the possibility. But in an interview, a retired Major General said Canada’s participation would likely be in the aftermath of the conflict.
• The conflict is causing uncertainty for the global economy, financial markets and commodity markets. Global equity markets have been relatively volatile this week, and the threat of higher inflation has pushed up global bond yields.

The uncertainty is carrying over to the outlooks for central banks and countries such as China, which has lowered its outlook for economic growth this year. Markets are struggling to see the end of the conflict, which is heightening concern about the global economy and financial markets. In Canada, gasoline prices are rising, which could push overall inflation higher.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.