Iran Tanker Attacks Rattle Oil as TSX Slips, Loonie Firms
The week’s dominant story was the Iran conflict, with tanker attacks in the Strait of Hormuz pushing WTI crude higher even as gold fell, an unusual split that left markets absorbing the shock without a clear flight to safety. Canadian equities slipped alongside a weaker Nasdaq, but the loonie firmed against both the US dollar and the euro, tracking the Bank of Canada’s rate increase to 2.5% and softer domestic inflation readings. European stocks moved the other way entirely, climbing through a steady European Central Bank backdrop while North American indexes retreated. Behind the headline indexes, risk appetite thinned, with the VIX drifting higher over the period and the crypto fear and greed index falling sharply. The coming week hinges on US payrolls, CPI and PPI reshaping the rate debate on both sides of the border, a heavy slate of Canadian energy earnings led by Enbridge, and whether the Hormuz shipping disruption eases or widens further.
The Week in Brief
A Canadian investor closed the week with the S&P/TSX Composite down 0.47% to 35,620.00, a milder decline than the 2.00% slide in the Nasdaq to 25,437.00, though smaller than the S&P 500’s 0.57% dip to 7,580.07. The loonie firmed against both major currencies, with USD/CAD falling 0.28% to 1.3973 and EUR/CAD down 0.80% to 1.5591, a move that tracked the Bank of Canada’s rate increase to 2.5% in October and the broader repricing of the Canadian rate path. European equities moved the other way entirely: the Euro Stoxx 50 gained 1.04% and the STOXX Europe 600 rose 1.73%, a divergence from the North American pullback that left Canada sitting between a soft US tech retreat and a firmer European tape. Behind the equity moves, the week’s dominant geopolitical story was the Iran conflict, with tanker attacks in the Strait of Hormuz pushing WTI crude up 0.82% to 104.12 even as gold fell 2.72% to 3,898.90, an unusual pairing for a risk-off week. The VIX barely moved, down 0.15% to 19.42, but it had climbed steadily from 16.68 at the start of the period, and the crypto fear and greed index fell sharply from 63 to 30, suggesting risk appetite thinned beneath the surface even where headline indexes held up. The Russia-Ukraine file also stayed active, with a Russian oil refinery struck and a localized ceasefire reported in Oleshky, while the week ahead brings the Bank of Canada’s rate path, US employment and inflation data, and a heavy slate of Canadian earnings into view.
By Atlas
Geopolitics and Markets
The Iran conflict was the week’s most persistent geopolitical driver, with a string of severity-8 events culminating in reports that four oil tankers were hit by mines in the Strait of Hormuz, and oil spills reportedly reaching the UAE coastline. WTI crude rose 0.82% over the week to 104.12, a measured move given the scale of the disruption, while gold, often a safe-haven beneficiary of this kind of escalation, fell 2.72% to 3,898.90, suggesting other forces outweighed the safe-haven bid. The asset tags tied to this cluster point to oil, energy, airlines, shipping and Canadian energy names including Enbridge, Canadian Natural Resources, Suncor and Cenovus, alongside Trump’s comment that the conflict would end soon, a line repeated across multiple reports without further detail. A parallel Russia-Ukraine thread also carried severity-8 weight, with a Russian oil refinery struck amid renewed Ukrainian drone attacks, and the United Nations describing Russian strikes on Ukraine’s energy infrastructure as a war crime; the tagged assets here are energy, wheat, gold, the euro and defence names, alongside the same Canadian energy and transport group. For currencies, the US dollar index was essentially flat on the week, up 0.07% to 101.88, while the euro area reaction showed up instead in equities, with the Euro Stoxx 50 and STOXX Europe 600 both posting gains even against this backdrop of escalation. What would change the picture: a confirmed de-escalation in Hormuz shipping attacks would likely cap the oil bid, while any widening of the Russian energy-infrastructure strikes could put renewed pressure on European gas-exposed names and the euro. For now, the moves in oil and gold are pulling in different directions, and that divergence is worth watching alongside the VIX, which rose from 16.68 to 19.42 over the period even as equity indexes showed only moderate declines.
By Atlas
Central Banks, Rates and Data
The Bank of Canada raised its target overnight rate to 2.5% in October, a move banks followed by raising prime rates, and Canadian inflation data gave the decision cover: headline CPI eased to plus 2.8% year over year in September from plus 3.0%, with CPI-trim at 1.8% and CPI-median at 1.9%, both down from the prior month. The labour market softened slightly, with unemployment at 6.5% in September versus 6.4% previously and employment down to 21,104.8 thousand from 21,173.1 thousand, while the Canada 10-year yield rose to 3.88% from 3.67%. Prediction markets now put the odds of a 25-basis-point October hike at 75%, down from 82% a week ago, and odds of no change in December have fallen to 62% from 70% a day ago, while the odds of a 25-basis-point December hike have risen to 38% from 32% a day ago, pointing to a market that is less certain the tightening cycle is finished. In the United States, the Federal Reserve faces a backdrop of resilient data: the advance GDP reading came in at 3.4% versus a forecast of 3.2%, unemployment claims at 194K beat the 198K forecast, and core PCE inflation matched forecast at 0.3% month over month. The US 10-year yield fell 5.9 basis points over the week to 4.929%, even as the dollar index held roughly flat. For equities, the combination of a still-hiking Bank of Canada and resilient but not overheating US data leaves the rate path uncertain into December, a backdrop that likely contributed to the Nasdaq’s 2.00% weekly decline and the more modest 0.57% and 0.47% declines in the S&P 500 and S&P/TSX Composite respectively. The coming weeks bring US payrolls, CPI and PPI, all of which will shape whether prediction markets keep trimming Bank of Canada hike odds or reverse course.
By Atlas, Bretton, Jefferson and Meridian
Europe and the ECB
The European Central Bank held its deposit facility rate unchanged at 2.5% through the week, giving European equities a steady policy backdrop against which the Euro Stoxx 50 rose 1.04% to 6,131.31 and the STOXX Europe 600 gained 1.73% to 646.75, both outperforming the pullback in North American indexes. On trade policy, the European Commission expanded its trade-defence activity, registering imports of cellulose ethers from China and Korea, steel wire ropes and cables from India, Thailand and Türkiye, and acetylsalicylic acid from China, while imposing a definitive anti-dumping duty on PET Spunbond from China, an official Commission action that tightens import conditions for those goods. The Commission also renewed the mandate of its European Coordinator for Central and South-East European energy interconnectivity and amended the market stability reserve covering buildings, road transport and additional sectors, both steps in building out the bloc’s carbon-pricing architecture rather than a change of direction. For Canada, the most direct link was the 21st EU-Canada summit in Montreal on October 29 and 30, where the European Council and European Commission issued joint statements launching what they called the EU-Canada Alliance for the Future, alongside a separate push on medical countermeasures cooperation between Commissioner Hadja Lahbib and Minister Mélanie Joly; the substance of the alliance beyond its title was not detailed in the official statements. None of this points to an immediate euro-area rates story, but the combination of a steady ECB, active trade-defence measures and a firmer European equity tape sits in contrast to the softer North American and Canadian indexes this week, and the EU-Canada alignment is worth watching for any follow-through into trade or procurement terms that would bear directly on Canadian exporters.
By Atlas, Schuman and Monnet
United States: Politics and Policy
Washington’s legislative record this week was mostly procedural, according to congressional tracking of bill status. The bulk of activity was routine bill introduction and referral to committee, which carries weak signal for markets. The items with real institutional follow-through were narrower: the Montana Sportsmen Conservation Act was ordered to be reported favorably, the Driver Technology and Pedestrian Safety Act of 2025 was forwarded by subcommittee to full committee, and a cluster of Energy and Natural Resources bills, including measures on offshore critical minerals, shore protection and public lands, had hearings held. The National Defense Authorization Act for Fiscal Year 2027 was received in the Senate, though that is standard annual processing rather than a new policy signal.
For an investor, the committee-stage movement on critical minerals and resource bills is the one thread worth watching, since further progress could eventually touch miners, processors and industrial-metals supply chains if the text advances toward permitting or export provisions. The NDAA’s progress is relevant background for defense contractors and the procurement complex, though receipt in the Senate alone is not a catalyst. Housing and financial-services bills referenced this week, including measures touching affordable housing and loan-level pricing adjustments, remain at an early stage and are not yet actionable. None of this week’s activity points to imminent tariff action or a concrete new trade measure.
By Nixon and Garrison
Canada: Politics and Policy
Ottawa’s policy flow this period leaned toward strategic industrial support and trade diversification rather than fiscal tightening. The government announcement of a federal commitment of up to $1.6 billion in Cohere, framed as building secure, sovereign, Canadian-made AI, is the largest single economic signal of the week and points to support for Cohere and the broader domestic compute and data-infrastructure stack. A parliamentary record shows legislation has passed extending the federal fuel excise tax relief, which should ease fuel costs for households and transportation-heavy businesses, a modest consumption support rather than a large demand shock. On trade, government announcements describe a new Strategic Partnership with the United Arab Emirates, including a trade agreement and investment commitments following the Abu Dhabi Crown Prince’s visit, and separately a Canada-EU Alliance for the Future framing the relationship as a shared prosperity and economic-security space, both pointing to upside for exporters and cross-border supply-chain firms. Smaller infrastructure items, including up to $8.75 million for the Ballantrae Multi Sport Complex and federal-Manitoba and Mont Farlagne infrastructure partnerships, support local construction and contractors. A government investment through the First and Last Mile Fund continues to back access to the Shaakichiuwaanaan lithium project in northern Quebec, reinforcing the critical-minerals theme. None of these items speaks directly to the Bank of Canada’s rate path or the Canadian dollar.
By Laurier and Maple
The Week Ahead
The coming two weeks bring three high-impact US releases that will shape the rate debate 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. No dated Canadian releases appear in the window, though Statistics Canada’s inflation, Labour Force Survey and monthly GDP reports are due on their usual monthly rhythm and will matter for the Bank of Canada’s December decision, currently priced by prediction markets at 62% for no change and 38% for a 25-basis-point hike. Canadian earnings pick up heavily, with 70 companies reporting in the week of November 2, including Enbridge, Canadian Natural Resources, Cenovus, BCE, Brookfield and Fortis, followed by 25 more in the week of November 9, including Barrick, CAE and Power Corporation. For the Iran file, any confirmed easing of tanker attacks in the Strait of Hormuz would be the key variable for WTI crude and gold, while a widening of Russian strikes on Ukrainian energy infrastructure could put renewed pressure on European gas-linked names and the euro. On rates, a soft US payrolls print or cooler CPI reading would likely reinforce the US 10-year yield’s recent decline, while strong data could revive the dollar and complicate the case for further Bank of Canada tightening.
By Atlas
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Atlas
Geopolitical & Macro Analyst
Macro and Geopolitical Report · Saturday, October 31, 2026 · Weekly macro and geopolitical report
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