THIS WEEK’S OUTLOOK– April 14, 2025

Global Economy and Markets Under the Shadow of Tariffs: How to Build a Resilient Investment Strategy

Amid renewed tariff threats from the Trump administration, global markets have experienced renewed turbulence. Tariff policies can have far-reaching impacts on inflation, consumer confidence, corporate investment decisions, and even international relations. In this heightened climate of uncertainty, how should investors interpret the macroeconomic signals behind these developments? What key variables will shape market movements ahead? And how can one strike a balance between stability and growth during volatile times?

In AimStar’s latest strategy report, Scott Cheng, Senior Vice President and Portfolio Manager, notes that the Trump administration’s tariff actions are injecting significant uncertainty into the global economic outlook, inflation trajectory, and market sentiment.

Key Highlights from the Report:

  • Short-Term Strategy: Adopt a defensive asset allocation by increasing exposure to fixed income and defensive equity sectors.

  • Medium-Term Outlook: Stay responsive to macroeconomic indicators and corporate earnings data, with flexibility to adjust portfolio allocations accordingly.

  • Long-Term Core View: Maintain diversification and a long-term investment approach, seizing opportunities during structural pullbacks.

The report also points out that current market valuations have corrected to relatively reasonable levels. Should trade tensions ease or the Federal Reserve signal a shift toward monetary accommodation, a technical rebound may follow.

👉 For the full analysis, read the article:

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Divergence Ahead of Bank of Canada Rate Decision as Tariff Uncertainty Weighs on Outlook

With just two days remaining before the Bank of Canada’s (BoC) rate announcement, economists and markets remain sharply divided on the likely policy direction. Amid renewed volatility triggered by U.S. tariff policy under former President Donald Trump, the central bank may opt to hold rates steady—or proceed with another cut.

According to a Reuters survey conducted last week, over 60% of economists expect the BoC to maintain its overnight rate at 2.75% this Wednesday (April 10). However, 11 analysts foresee a 25-basis-point rate cut. Market pricing for a rate cut has also moderated, with the probability dropping from 40% to 32%, partially due to the U.S. administration’s decision to delay the implementation of its latest tariff package by 90 days—giving Canada temporary reprieve from retaliatory measures.

Nonetheless, Canada’s economic outlook remains under pressure. Economists have downgraded their GDP growth forecasts for 2024 and 2025 to 1.2% and 1.1%, respectively. CIBC Chief Economist Avery Shenfeld warned that despite the current pause in trade actions, ongoing policy uncertainty continues to discourage business investment in Canada.

Prime Minister Mark Carney also acknowledged that the emerging trade tensions have already begun to weigh on both global and domestic economies, with early signs of strain particularly visible in Canada’s labor market.

Adding further complexity to the BoC’s decision is the inflation data set to be released Tuesday. While consensus estimates point to a stable March CPI at 2.6% year-over-year, BMO projects a potential uptick to 2.7%—exceeding the current inflation rate in the United States.

While many analysts expect the BoC to hold rates this week, the broader consensus anticipates two rate cuts before the end of Q3, bringing the benchmark rate down to 2.25%. Some firms, including Capital Economics and BMO, forecast a deeper easing path toward 2.00%.

Jocelyn Paquet, Economist at National Bank of Canada, noted that while the trade war has yet to fully manifest in hard economic data, it has already had a significant impact on soft indicators. The University of Michigan’s Consumer Sentiment Index for April fell to its second-lowest level since 1978. Notably, the proportion of respondents who expect the unemployment rate to rise over the next 12 months has surged to its highest level since the 2008–2009 financial crisis.

Canada Accelerates Arctic Development Amid Strategic Turning Point

As the Trump administration intensifies its tariff policies and Canada faces mounting threats to national security and economic sovereignty, Arctic development has emerged as a central focus for Canadian policymakers and business leaders. In a comprehensive feature for the Financial Post, veteran journalist Joe O’Connor highlights Canada’s increasingly vulnerable position in the Arctic—citing pressing concerns over infrastructure, energy security, military presence, and sovereignty—as global demand for critical minerals rises and Arctic shipping lanes begin to open.

One key initiative gaining renewed attention is the long-proposed all-season road and deepwater port project connecting Yukon and Nunavut, championed by West Kitikmeot Resources. Once largely overlooked, the project is now being reconsidered in light of growing trade tensions between the U.S. and Canada. O’Connor warns that without urgent investment in Arctic infrastructure, Canada risks losing control over critical mineral resources in the region and may face escalating sovereignty disputes.

Drawing on insights from political leaders and academics, the article emphasizes that Canada’s northern territories are home to untapped reserves of gold, copper, oil, and rare earth elements—strategic resources collectively valued in the trillions of dollars. With the U.S.-Canada trade relationship under strain and Russia ramping up its Arctic presence, the stakes for Canada have never been higher. The country now faces a pivotal decision: to develop the Arctic or cede influence in the region.

O’Connor also notes that while successive prime ministers have floated Arctic strategies in the past, most plans were shelved due to the prohibitive costs, melting permafrost, and logistical challenges. However, with mounting pressure from Inuit communities, the mining sector, and national defense interests, Canada may finally be on the cusp of launching a full-scale Arctic infrastructure program—an initiative some compare in significance to the building of the transcontinental railway.

The article concludes by underscoring that with a sustainable long-term funding framework and collaboration with local communities, Canada has the opportunity not only to secure its Arctic sovereignty but also to ignite nationwide economic growth and strengthen national unity.

Pre-Market Overview for This Week

Canadian Stock Market

Canadian equities staged a strong rally last Friday, buoyed by rising metal prices and a surprise drop in U.S. producer inflation. The S&P/TSX Composite Index surged 573 points, or 2.5%, to close at 23,588—marking a weekly gain of 1.7%.

Mining, energy, and consumer sectors led the advance as market sentiment shifted on renewed hopes for earlier rate cuts by the U.S. Federal Reserve. March’s U.S. Producer Price Index (PPI) fell by 0.4%, the largest monthly decline since October 2023, driven by sharp drops in energy and food prices. The data reinforced expectations of easing inflationary pressures.

Despite lingering uncertainties around global trade policy, short-term sentiment in the Canadian market has improved. Analysts anticipate a consolidation phase early this week as investors digest recent gains.

U.S. Stock Market

U.S. stocks closed higher last week, with all three major indices posting their second consecutive weekly gains, signaling a resilient start to the Q1 earnings season led by the banking sector. The Dow Jones Industrial Average rose 1.56% to 40,212.71, the S&P 500 climbed 1.81% to 5,363.36, and the Nasdaq advanced 2.06% to 16,724.46. All three indices recorded their largest weekly gains in several months.

On the earnings front, JPMorgan Chase, Wells Fargo, and Morgan Stanley all reported stronger-than-expected first-quarter profits. However, the banks also cautioned that ongoing trade uncertainty could weigh on economic growth, prompting a more cautious market sentiment. According to LSEG data, analysts now project Q1 earnings growth for S&P 500 companies at 8.0%—down from the 12.2% forecast at the start of the quarter.

All 11 sectors of the S&P 500 ended the week in positive territory, with materials and technology stocks leading the gains. Investors continue to recalibrate their portfolios amid a complex macro backdrop, and many expect the market to remain range-bound in the near term.

Currency Markets

The U.S. dollar fell broadly against major currencies last Friday as heightened volatility stemming from unpredictable trade policies rattled global markets. The dollar weakened to a 10-year low against the Swiss franc and hit a three-year low against the euro. The U.S. Dollar Index (DXY) plunged over 1% to 99.01—its lowest level since April 2022—marking the largest weekly drop since early March.

Rising concerns over the U.S. economic outlook prompted a shift in investor sentiment, with safe-haven demand moving away from the greenback toward the Swiss franc and Japanese yen. Data showed a sharp decline in U.S. consumer confidence in April, while 12-month inflation expectations surged to the highest level since 1981.

By the close of trading Friday:

  • USD/CHF fell 0.71% to 0.81795,

  • USD/JPY dropped 0.24% to 144.05,

  • EUR/USD rose 0.85% to 1.1297, its highest since February 2022,

  • GBP/USD gained 0.67% to 1.3054.

Analysts warned that as U.S. recession risks mount, the dollar’s traditional role as a safe-haven asset is increasingly under pressure.

Gold & Oil Markets

Gold prices surged nearly 2% last Friday, breaking above the $3,200 per ounce mark for the first time in history, with intraday highs reaching $3,245.26. The precious metal posted a weekly gain of over 6%, its strongest performance of the year, as mounting concerns over a global economic slowdown and a weakening U.S. dollar fueled a flight to safety.

Analysts attributed the rally to a combination of factors: a sharp decline in the dollar, selloff in U.S. Treasuries, rising geopolitical tensions, growing expectations of Federal Reserve rate cuts, and continued central bank buying. Traders are now pricing in a 90-basis-point reduction in rates by year-end, with the first cut expected as early as June.

Crude oil prices also climbed on renewed geopolitical risks. Brent crude rose 2.26% to $64.76 per barrel, while WTI crude gained 2.38% to $61.50. U.S. Energy Secretary Jennifer Granholm indicated that the U.S. may tighten sanctions on Iranian oil exports, potentially exacerbating supply constraints.

Although trade war concerns continue to cloud the outlook for global demand, short-term supply risks have provided a strong floor for oil prices.

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Monday, April 14

  • U.S. Fed Speakers:

    • Richmond Fed President Tom Barkin

    • Atlanta Fed President Raphael Bostic

  • Earnings Releases:

    • Goldman Sachs

    • M&T Bank

    • Pinnacle Financial Partners

    • FB Financial

    • Applied Digital


Tuesday, April 15

  • U.S. Data:

    • Federal income tax filing deadline

    • March Import & Export Price Index

    • April Empire State Manufacturing Index

  • Canada Data:

    • March CPI inflation report

    • March home sales & quarterly housing market outlook (Canadian Real Estate Association)

  • Earnings Releases:

    • Johnson & Johnson

    • Bank of America

    • Citigroup

    • PNC Financial

    • Ericsson

    • United Airlines


Wednesday, April 16

  • U.S. Data:

    • March Retail Sales

    • March Industrial Production & Capacity Utilization

    • February Business Inventories

    • April NAHB Housing Market Index

  • U.S. Fed Speakers:

    • Cleveland Fed President Beth Hammack

    • Kansas City Fed President Jeffrey Schmid

    • Dallas Fed President Lorie Logan

  • Canada:

    • Bank of Canada rate decision & Monetary Policy Report

  • Earnings Releases:

    • Metro Inc.

    • ASML

    • Abbott Laboratories

    • Prologis

    • U.S. Bancorp

    • Kinder Morgan

    • Travelers

    • CSX Corp.


Thursday, April 17

  • U.S. Data:

    • Initial Jobless Claims (week ending April 12)

    • March Housing Starts & Building Permits

    • April Philadelphia Fed Manufacturing Index

  • Earnings Releases:

    • TSMC (Taiwan Semiconductor)

    • UnitedHealth Group

    • Netflix

    • American Express

    • Marsh McLennan

    • Blackstone

    • Truist Financial


Friday, April 18

  • U.S. Fed Speaker:

    • San Francisco Fed President Mary Daly

  • Earnings Release:

    • Corus Entertainment

Published by  Vikki Zhao

April 14, 2025 11:00 AM EST. 10 min read

AimStar Capital Group Inc. is a Canadian full-service Investment Dealer, regulated by Canadian Investment Regulatory Organization (CIRO) and a member of Canadian Investor Protection Fund (CIPF). As an independent firm, AimStar is built on a foundation of innovation, integrity, and client-centricity. They are committed to providing unbiased advice and dedicated to the client’s needs, helping them achieve their financial goals.

AimStar is recognized as a Wealth Professionals 5-star Wealth Management Firm for 2024, this award recognized AimStar has offered exceptional client experience, a proven investment track record, continuous innovation, and stringent regulatory compliance.

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