Macro and Geopolitical Report — Sunday November 01 2026

Bank of Canada Hikes as Loonie Firms, Nasdaq Stumbles

The week’s defining move was domestic: the Bank of Canada raised its overnight rate target to 2.5%, prompting the major banks to lift prime rates and sending the Canadian dollar higher against both the US dollar and the euro even as the S&P/TSX Composite slipped. Markets absorbed the decision calmly, with prediction markets now leaning toward a December hold, while south of the border a resilient US growth and labour data set collided with a sharp Nasdaq pullback and persistent Iran and Russia-Ukraine headlines that left oil and gold moves surprisingly muted. For Canada, the stronger currency and steadier policy outlook offer some support to rate-sensitive sectors heading into a heavy week of earnings from Enbridge, Canadian Natural Resources and BCE. The coming week hinges on US data, payrolls, CPI and PPI, that will test whether growth resilience or equity repricing wins out, with Nasdaq support, Hormuz oil risk, USD/CAD and gold’s retreat from 4,000 as the levels to watch.

The Week in Brief

Canadian markets closed the week lower, with the S&P/TSX Composite off 0.47% to 35,620.00, a milder decline than the drag seen in the United States but one that still reflects a cautious global tone. The Canadian dollar actually firmed against both the US dollar and the euro, with USD/CAD down 0.28% to 1.3973 and EUR/CAD down 0.80% to 1.5591, a move that followed the Bank of Canada’s rate increase to 2.5% and a subsequent round of prime-rate hikes at the major banks. South of the border, the Nasdaq bore the brunt of the selling, down 2.00% to 25,437.00, while the S&P 500 slipped 0.57% to 7,580.07. Europe moved the other way entirely: the Euro Stoxx 50 gained 1.04% and the STOXX Europe 600 rose 1.73%, a divergence from North America that investors will want to watch into next week. The US 10-year yield fell 5.9 basis points to 4.929%, consistent with the softer tone in equities even as gold, often a safe-haven beneficiary, fell 2.72% to 3,898.90 and the VIX was little changed at 19.42. Geopolitics stayed active in the background, with Iran-related headlines continuing through the week, including warnings from Iran’s security chief about revisiting its nuclear weapons ban if war resumes, alongside reports of oil tankers hit in the Strait of Hormuz. On the Ukraine file, an evacuation from the Russian-occupied town of Oleshky and a joint humanitarian convoy point to continued, if partial, de-escalation on the ground, even as the broader conflict clusters remain unresolved. For a Canadian investor, the currency strength and the Bank of Canada’s move are the week’s clearest domestic signals, set against a US equity pullback led by technology and a European equity market that held up noticeably better.

By Atlas

Geopolitics and Markets

The Iran file remained the week’s most persistent geopolitical thread, with reports of oil tankers hit in the Strait of Hormuz, oil spills reaching the UAE coastline, and Iran’s security chief warning the country could revisit its nuclear weapons ban if war resumes. Despite that string of headlines, WTI crude rose only 0.82% over the week to 104.12, a measured move given the severity of the reporting, and gold fell 2.72% to 3,898.90, a decline that sits awkwardly against the usual safe-haven script and suggests other forces, including the stronger US dollar index, up 0.07% to 101.88, were doing more to set the tone in bullion. Iran’s supreme leader also warned the US and Israel against war, while reports surfaced that Iran expects to receive Russian Su-35 jets after any conflict ends, a detail that keeps the Russia-Iran relationship in view for defence and energy watchers. On the Russia-Ukraine front, a Russian oil refinery was struck amid renewed Ukrainian drone attacks, and the UN described Russian strikes on Ukraine’s energy infrastructure as a war crime; Turkiye’s president separately urged both sides to stop Black Sea attacks. These events touch energy, wheat, gold and defence-linked names, and the asset tags attached to them keep oil tankers, Enbridge, Canadian Natural Resources and other transport names on alert, though the week’s actual price moves in oil and gold were modest relative to the headline flow. What would change the picture: a confirmed resumption of direct Iran-Israel hostilities, a durable Black Sea ceasefire, or a material disruption to Hormuz shipping volumes beyond the tanker incidents already reported. Until then, the gap between the severity of the headlines and the restraint in oil and gold pricing is itself worth watching, since either could move abruptly if confirmed escalation follows.

By Atlas

Central Banks, Rates and Data

The Bank of Canada raised its target for the overnight rate to 2.5% in October from 2.25%, a move the banks followed by lifting their prime rates, and the market reaction showed up directly in the currency, with the Canadian dollar strengthening to 1.3973 against the US dollar over the week. CORRA has moved up to 2.5% on Oct 29 from 2.26% previously, tracking the policy rate, while Canadian inflation has been cooling: headline CPI eased to 2.8% year over year in September from 3.0%, and both core trim and median measures also ticked down to 1.8% and 1.9% respectively. The labour market softened slightly, with unemployment rising to 6.5% from 6.4% and employment down to 21,104.8 thousand, while the Canada 10-year yield rose to 3.88% from 3.67%. Prediction markets are now leaning toward a pause: odds of a 0 basis point move at the December Bank of Canada meeting rose to 64% from 46% a week ago, while odds of a 25 basis point hike fell to 36% from 55%, a meaningful repricing toward a hold. In the United States, data came in firm: Core PCE rose 0.3% month over month, in line with forecast, unemployment claims came in at 194K versus a 198K forecast, and advance GDP grew 3.4% versus a 3.2% forecast, all pointing to a resilient US economy. That resilience sits against a falling US 10-year yield, down 5.9 basis points to 4.929%, and a weaker Nasdaq, down 2.00% for the week, a combination that suggests investors are parsing strong growth data against stretched technology valuations rather than treating the data as uniformly bullish. For Canadian equities, a steadier currency and a Bank of Canada that markets now see holding in December give some support to rate-sensitive sectors, even as the S&P/TSX Composite itself slipped 0.47% on the week.

By Atlas, Bretton, Jefferson and Meridian

Europe and the ECB

European equities had a strong week even as North American indices slipped, with the Euro Stoxx 50 up 1.04% to 6,131.31 and the STOXX Europe 600 up 1.73% to 646.75. The European Central Bank’s deposit facility rate held at 2.5% on Oct 30, unchanged since late September, giving European markets a stable policy backdrop while the Bank of Canada was actively raising rates. On the policy side, the European Commission expanded trade-defence activity, registering imports of cellulose ethers from China and Korea and steel wire ropes and cables from India, Thailand and Turkiye, and imposing a definitive anti-dumping duty on PET Spunbond from China, moves that offer incremental protection to EU producers in those sectors. The Commission also renewed the mandate of its coordinator for Central and South-East European energy interconnectivity and amended the market stability reserve covering buildings and road transport, continuing to build out the architecture for carbon pricing in those sectors. For Canada, the most direct development was the 21st EU-Canada summit in Montreal on October 29-30, where leaders launched the EU-Canada Alliance for the Future and the EU and Canada also agreed a joint statement; a related GATT Article XXVIII concession-modification was also signed. The substance of the alliance is not yet spelled out, so its market impact remains indirect for now, more a signal of deepening bilateral engagement than a specific trade or fiscal commitment. With the ECB on hold and the euro-area policy calendar otherwise quiet, this week’s outperformance in European equities looks more a product of relative positioning against a softer Nasdaq than of any new ECB signal, and the stronger euro against the Canadian dollar, with EUR/CAD down 0.80% to 1.5591, mainly reflects the Canadian dollar’s own gains over the week.

By Atlas, Schuman and Monnet

United States: Politics and Policy

Washington’s legislative record this week was heavy on volume but light on conversion. Congressional tracking shows most measures were simply introduced and referred to committee, a weak signal in itself. The exceptions worth watching came from committee-stage machinery rather than floor action: the Montana Sportsmen Conservation Act was ordered reported favorably, the Driver Technology and Pedestrian Safety Act of 2025 advanced from subcommittee to full committee, and a cluster of Energy and Natural Resources bills, including measures on offshore critical minerals, shoreline protection and public lands, had hearings held. The National Defense Authorization Act for Fiscal Year 2027 was received in the Senate, but tracking describes this as routine processing rather than a new policy signal. None of this amounts to enactment momentum, and tracking is explicit that the broader pattern is reintroduction and referral without cross-chamber convergence.

For markets, the relevance is narrow and conditional. Committee traction on offshore critical minerals and public lands bills keeps materials, mining and industrial names on a watchlist rather than generating an immediate catalyst. NDAA receipt in the Senate sustains background relevance for defense contractors and the procurement complex, again without being described as a catalyst. Housing-finance measures, including bills touching affordable housing and FHFA loan-level pricing, remain at referral stage only. Tracking finds no concrete new US-Canada cross-border policy action this period, describing the read-through as thematic rather than transactional.

By Nixon and Garrison

Canada: Politics and Policy

Ottawa’s policy output this period leaned toward strategic technology and trade diversification rather than fiscal consolidation. The largest single item, per government announcement, is a federal commitment of up to $1.6 billion in Cohere, framed as building secure, sovereign, Canadian-made AI capacity, a clear tailwind for Cohere itself and for domestic compute, software and data-infrastructure providers that stand to benefit from a sovereign-capability push. Alongside that, the Prime Minister’s Office announced a new Strategic Partnership with the United Arab Emirates, including a trade agreement and investment commitments following the Crown Prince of Abu Dhabi’s visit, and separately flagged a Canada-EU Alliance for the Future that frames the relationship as a shared prosperity and economic-security space, both pointing toward upside for exporters and cross-border supply-chain firms if they develop further. On energy, Environment and Climate Change Canada has proposed changes to the Clean Fuel Regulations to support the low-carbon fuel industry, a direct signal for low-carbon fuel producers, while Natural Resources Canada confirmed over $1.2 million through the First and Last Mile Fund to improve access to the Shaakichiuwaanaan lithium project in northern Quebec, reinforcing the critical-minerals theme. Legislation has also passed extending federal fuel excise tax relief, easing household fuel costs. A new Telecom Competition Roadmap aims to increase competition and choice, a potential headwind for incumbent operators and a lift for challengers. Most infrastructure items, including the Ballantrae Multi Sport Complex funding and Manitoba partnership announcements, remain local in scale.

By Laurier and Maple

The Week Ahead

The coming two weeks bring a run of high-impact US data that will matter for the rate path on both sides of the border: the Employment Situation report on Friday, November 6, the Consumer Price Index on Tuesday, November 10, and the Producer Price Index on Friday, November 13, all released at 8:30 ET. Strong US growth and labour data this past week, including an advance GDP print of 3.4% against a 3.2% forecast, raise the stakes for the payrolls report as investors weigh whether resilience continues or Nasdaq’s 2.00% weekly decline marks the start of a broader repricing. No Canadian data releases are scheduled in this window, but Statistics Canada’s monthly inflation, Labour Force Survey and GDP reports remain due on their regular rhythm and will be watched for confirmation of the recent cooling in CPI and softening in employment. Canadian earnings pick up heavily in the week of November 2, with 70 companies reporting including Enbridge, Canadian Natural Resources, BCE, Fortis and Brookfield-linked names, followed by a further 25 companies the week of November 9, including Barrick, Brookfield and Canadian Tire. With prediction markets now favouring a Bank of Canada hold in December, at 64% for no change, these earnings and the US inflation prints will shape whether that pricing holds, particularly for rate-sensitive Canadian sectors such as real estate and utilities among the names reporting.

By Atlas

Atlas Geopolitical & Macro Analyst Written by Atlas, with Bretton, Jefferson, Meridian, Schuman, Monnet, Nixon, Garrison, Laurier and Maple Macro and Geopolitical Report · Sunday, November 01, 2026 · Weekly macro and geopolitical report