It’s one of those calendar moments that makes you pause: a full year has passed since the so‑called “Liberation Day,” and the geopolitical backdrop remains just as unpredictable. Yes, we’ve learned that whenever markets throw a tantrum, there’s always TACO, a Trump put, or some other flimsy acronym ready to explain an erratic negotiating style, if you can call it that. Despite countless headlines, speeches, and market‑moving moments, the global landscape still feels unsettled, if not outright chaotic. Along the way, we’ve revisited Trade 101, dusted off old geopolitics and the Monroe Doctrine, and relearned how pushing everyone to the edge, then backpedaling, creates a textbook buy‑the‑dip setup. For analysts and investors, time has delivered less clarity than expected, underscoring how persistent and unpredictable this volatility cycle really is.
The main takeaway from yesterday’s Trump address is that the conflict with Iran is nowhere near done. President Trump made it clear the military campaign is rolling on for at least another two to three weeks as the administration pushes to “finish the job.” He highlighted the dismantling of Iran’s naval and air‑defense capabilities and said US forces are closely monitoring the damaged nuclear facilities. Notably absent, though, was any talk of ground troops, or any direct appeal for the Iranian public to rise up and overthrow the regime. This remains a campaign from the air, and at arm’s length.
If anyone was hoping for an offramp toward peace, that wasn’t on offer. The tone of the address leaned firmly toward escalation. Trump explicitly threatened to target Iran’s electric grid if no agreement materializes, signaling that economic pain remains a deliberate pressure tactic. The administration seems comfortable treating the spike in energy prices as collateral damage in pursuit of its military objectives. For global investors, the uncomfortable truth is that this conflict likely isn’t nearing its end, it may only be reaching halftime, with volatility baked into the outlook for weeks to come.
Energy, meanwhile, is being framed not just as a vulnerability but as an opportunity. Trump urged Europe to step up purchases of American oil and confirmed the US is moving to secure Venezuelan supply as a strategic asset. At the same time, he made it clear that reopening the Strait of Hormuz is largely someone else’s problem, expecting European and Asian allies to handle the operational heavy lifting. The message was unmistakable: Washington will set the terms, but others can manage the mess.
Markets wasted no time adjusting to the reality of a longer war. US stock futures slid, the US Dollar recovered, and Brent pushed well beyond $104 a barrel as traders priced in a persistent supply squeeze. As long as the Strait remains compromised, even partially, global supply chains stay under strain. Risk assets will remain jumpy, and volatility is here to stay, regardless of how or when this conflict ultimately ends.
CAD: Deliberations reiterate cautious outlook
The Canadian dollar is struggling to regain its footing, weighed down not only by another tango night with a firmer US dollar and a pickup in volatility, but also by central bank minutes that underscored policymakers’ cautious mindset. As investors digest what is effectively a prolonged wait‑and‑see approach, the Loonie has given back some recent momentum. It briefly slipped to around 1.387 yesterday before staging an overnight rebound and reclaiming the 1.39 handle following Trump’s address.
On the other hand, positioning data shows traders easing out of their most bearish bets on the Loonie, though confidence remains slightly bearish. Recent shifts in the geopolitical backdrop have also added some pressure off oil prices, limiting the central bank timeline to assess how these external shocks unfold.
The price action mirrors the Bank of Canada’s own balancing act. Despite expectations that consumer prices may continue to edge higher, officials opted to hold rates steady at 2.25% at their latest meeting. The decision highlights the tension between guarding against inflation risks and acknowledging lingering economic headwinds, reinforcing the sense that policy is on hold until clearer signals emerge
A large part of that caution stems from volatile energy prices driven by global tensions, which continue to inject uncertainty into the domestic outlook. Higher gasoline costs pose a clear inflation risk, but the Bank of Canada has signaled some room to maneuver, pointing to remaining slack in the broader economy.
Looking ahead, the policy path implied by markets remains cautious rather than aggressive. Overnight index swaps show little urgency for near‑term action, with the first meaningful move not priced until the second half of the year and a gradual accumulation of hikes into late 2026. That outlook aligns with a cooling labor market and softer industrial momentum, reinforcing the Bank’s preference for wait-and-see over commitment.
MXN: From carry darling to risk proxy
Mexico’s recovery continues to look uneven, with the manufacturing sector still stuck in low gear. The latest March 2026 readings reinforce that picture: the S&P Global Mexico Manufacturing PMI came in at 47.1, while the IMEF Manufacturing Index printed at a similarly soft 47.4, both firmly below the 50 threshold that separates expansion from contraction. Even services are starting to feel the strain, with the IMEF Non‑Manufacturing Index slipping to 49.7. Taken together, the data suggest that a mix of restrictive domestic rates and cooling global demand is keeping growth restrained, leaving the economic engine idling rather than accelerating.
That macro backdrop is increasingly reflected in market positioning. From a technical and sentiment standpoint, the once‑durable “Super Peso” narrative is beginning to lose its shine. USD/MXN has pushed up to 17.93, breaking above its 20‑day (17.82) and 50‑day (17.50) moving averages, with the 200‑day resistance near 18.17 now clearly in sight. But beyond the charts, the more important shift is psychological. Correlation data shows the peso’s sensitivity to the VIX has jumped to nearly 0.90, meaning the currency is now trading almost in lockstep with global risk sentiment. A currency that weeks ago thrived on carry appeal has increasingly become a vehicle for risk‑off deleveraging, leaving it far more exposed to any wobble in global confidence.
Market snapshot
Table: Currency trends, trading ranges & technical indicators
Key global risk events
Calendar: March 30 – April 3
All times are in EST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
