Power Plants at the Center of Escalating Middle East Conflict, Driving Oil Surge and Strengthening USD

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

US Dollar        1.3620-1.3870

Euro                1.5800-1.6050

Sterling           1.8290-1.8540

WTI Oil (opening level) $90.91

The CAD/USD is opening at 1.3742 ( 0.7277 )

USD/CAD rises to higher levels in the near-term is mildly bullish as spot extends above the 20-day Exponential Moving Average (EMA), which has started to edge higher and underpin the recent series of higher daily closes.

Initial support emerges at 1.3685, aligning with the rising 20-day EMA, with a deeper floor at 1.3640, where the latest pullback base formed. A break below 1.3640 would weaken the bullish structure and expose the 1.3585 region next. On the topside, immediate resistance stands at the January 23 high of 1.3800, ahead of a more significant barrier near 1.3840, where a rejection would signal fading upside pressure.

Headlines

• Stock futures fall while oil prices rise, as fragile optimism around a potential de-escalation fade. Trump’s decision to delay strikes on Iranian power plants—citing talks that Iran denied took place —initially supported risk sentiment, but caution has since returned as Israel continues its attacks. Meanwhile, reports that Saudi Arabia and the United Arab Emirates are preparing to join the conflict point to a potential escalation. The ongoing fighting continues to strain global supply chains for crude, refined fuels, fertilizers, and other key commodities as the Strait of Hormuz—a critical chokepoint remains under Iran’s control and effectively closed.
• US private equity funds remain under pressure amid rising redemption requests from investors concerned about a recent spate of high-profile losses and growing unease over exposure to software companies vulnerable to AI disruption. These concerns have prompted outflows from private credit funds, testing safeguards designed to prevent forced sales of loans. Decisions by some of the largest private equity firms, including BlackRock and Apollo to restrict redemptions risk triggering a backlash from retail investors. However, executives argue such measures are necessary to protect remaining investors and avoid liquidating illiquid assets at distressed prices.
• Japan's annual inflation dropped to 1.3% in February 2026, the lowest since March 2022. Food, transport, and clothing inflation slowed, while energy costs fell sharply. Inflation rose for household items, communications, and recreation. Core inflation fell to 1.6%, below the central bank's 2% target. Monthly CPI decreased by 0.2%, marking a three-month decline.
• Australia's flash Services PMI for March fell sharply to 46.6 vs. 52.8 in February. The Manufacturing PMI fell to 50.1 versus 51.0 in February..
• The Chicago Fed National Activity Index fell to -0.11 in February from an upwardly revised +0.20 in January, suggesting economic growth decreased in the month.

Key Points

• Equities: Relief lifted the U.S. and Europe, while Asia reflected Monday’s oil-shock selloff before a cautious Tuesday rebound.
• Volatility: VIX eases to 26.15, geopolitical risk remains key.
• Digital Assets: Crypto rebounds with risk mood, Bitcoin leads, IBIT inflows strong, ETHA lags.
• Fixed Income: Global yields lower, but volatile after Trump’s claims of diplomacy with Iran.
• Currencies: USD partially rebounds after sell-off on Trump’s claims of diplomacy with Iran.
• Commodities: Crude rebounds on escalating conflict concerns. Fertilizer shortages begin to bite. Gold holds above its 200-day moving average.