Global Economy Faces Tough News Amid Rising Interest Rates

The global economic landscape is facing tough news on multiple fronts, driving interest rates higher and the US dollar lower. The collapse of US-Canada trade relations has led Canada to match new US tariffs, which will hurt both countries.

Canadian business leaders are rallying around their government's response to the US moves, but significant parts of the US will bear the brunt of higher prices due to Canada's supply of oil and gas. This situation will be discussed at the upcoming Jackson Hole symposium.

In other news, global PMIs remain mostly positive, despite some softer readings in Australia and the US. Japan's inflation rose to 1.9% in July, its highest since December 2025, while factory activity in India is expanding rapidly.