Weekly Market Pulse - Week ending August 21, 2026
Market developments
Equities: Global equities posted broad gains on the week, led by technology and emerging markets. The Nasdaq rose, propelled by Nvidia's blockbuster earnings and outlook that reinvigorated confidence in the AI trade. Early in the week, uncertainty around US plans regarding Iran briefly dampened sentiment before the Treasury Department announced a broad sanctions campaign targeting Iranian aviation, shipping, technology and financial sectors.
Fixed Income: The dominant theme in fixed income was the Jackson Hole symposium, where Fed Chair Warsh delivered a hawkish message on Friday, warning that inflation is not meaningfully slowing and that the Fed has "work to do", pushing the probability of a September rate hike to approximately 60%. The front end of the U.S. Treasury curve bore the brunt of the move, with the 2-year yield rising more than the long end of the curve.
Commodities: Commodities were broadly weaker on the week, with energy and precious metals leading the declines. Brent crude fell. Gold was the week's standout loser, falling approximately 4% from, hit by a combination of dollar strength, rising real yields following Warsh's speech and the fact that U.S. Iran sanctions specifically targeted gold flows.
Performance (price return)
SECURITY |
PRICE |
WEEK |
1 MONTH |
3 MONTH |
YTD |
Equities ($Local) |
|
|
|
|
|
S&P/TSX Composite |
36,553.92 |
-0.18% |
2.25% |
5.90% |
15.27% |
S&P 500 |
7,711.76 |
0.49% |
3.81% |
1.96% |
12.65% |
NASDAQ |
26,402.42 |
0.85% |
6.13% |
-1.91% |
13.60% |
DAX |
26,569.99 |
1.66% |
4.34% |
5.89% |
8.49% |
NIKKEI 225 |
66,405.56 |
0.59% |
6.48% |
2.65% |
31.92% |
Shanghai Composite |
3,952.18 |
1.20% |
3.64% |
-3.57% |
-0.42% |
Fixed Income |
|
|
|
|
|
Canada Aggregate Bond |
242.01 |
0.43% |
-0.88% |
-1.03% |
0.44% |
US Aggregate Bond |
2351.54 |
0.46% |
0.22% |
-0.16% |
0.11% |
Europe Aggregate Bond |
245.69 |
-0.03% |
-0.67% |
-1.10% |
-0.45% |
US High Yield Bond |
29.97 |
0.36% |
1.13% |
1.23% |
2.81% |
Commodities |
|
|
|
|
|
Oil |
83.41 |
-4.19% |
5.24% |
-6.18% |
45.26% |
Gold |
4456.56 |
-3.18% |
10.60% |
-0.86% |
3.18% |
Copper |
653.70 |
-0.76% |
3.40% |
1.73% |
15.05% |
Currencies |
|
|
|
|
|
US Dollar Index |
99.67 |
0.88% |
-1.72% |
0.65% |
1.37% |
Bitcoin (CAD) |
107,788.82 |
0.98% |
19.53% |
6.39% |
-10.16% |
Loonie |
1.3904 |
-1.04% |
1.46% |
-0.86% |
-1.29% |
Euro |
0.8633 |
-0.81% |
1.73% |
-0.58% |
-1.38% |
Yen |
160.1 |
-0.72% |
2.34% |
-0.54% |
-2.12% |
Source: Bloomberg, as of August 28, 2026
Central Bank Interest Rates
Central Bank |
Current Rate |
December 2026 |
Bank of Canada |
2.25% |
2.42% |
U.S. Federal Reserve |
3.75% |
4.01% |
European Central Bank |
2.25% |
2.63% |
Bank of England |
3.75% |
4.00% |
Bank of Japan |
1.00% |
1.38% |
Source: Bloomberg, as of August 28, 2026
*Expected rates are based on bond futures pricing
Macro developments
Canada – Growth Rebounds Sharply as Economic Activity Broadens
Canada’s economy expanded at a 3.3% annualized pace in Q2, marking a significant rebound from the weak start to the year. Monthly GDP rose 0.3% in June, extending a three-month run of gains, with growth driven largely by wholesale and retail trade, public administration and broader service-sector activity. Year-over-year GDP growth accelerated to 2.0%, suggesting domestic activity proved more resilient than many had expected despite ongoing trade uncertainty.
U.S. – Inflation Remains Sticky While Growth Holds Steady
July PCE inflation rose 0.2% month-over-month and held at 3.7% year-over-year, while core PCE also increased 0.2% on the month and remained at 3.3% annually. The data showed underlying price pressures remain persistent even as consumer spending growth moderated, reinforcing expectations that the Federal Reserve will remain cautious about easing policy.
The second estimate of U.S. Q2 GDP was unchanged at a 1.5% annualized pace, indicating the economy continued to expand at a moderate rate. The stable reading points to continued economic resilience, though growth remains well below the pace seen during stronger phases of the cycle.
International – Japan Inflation Firms While Labour Market Remains Tight
Japan’s Tokyo CPI slowed slightly to 1.9% year-over-year in August, while core inflation excluding fresh food came in at 1.8%. Although headline inflation eased, underlying price pressures continued to broaden and core measures remained close to the Bank of Japan’s target, supporting expectations for further policy normalization.
Japan’s unemployment rate edged down to 2.4% in July, highlighting the continued strength of the labour market. The combination of a tight employment backdrop and firming underlying inflation reinforces the case for the Bank of Japan to gradually tighten policy further.
Quick look ahead
DATE |
COUNTRY / REGION |
EVENT |
|
SURVEY |
PRIOR |
01-Sep-26 |
Eurozone Aggregate |
CPI Estimate YoY |
Aug P |
3.30 |
2.9 |
01-Sep-26 |
Eurozone Aggregate |
CPI YoY |
Aug P |
3.30 |
2.9 |
01-Sep-26 |
Eurozone Aggregate |
CPI MoM |
Aug P |
0.50 |
0.2 |
01-Sep-26 |
Eurozone Aggregate |
CPI Core YoY |
Aug P |
2.50 |
2.5 |
01-Sep-26 |
Eurozone Aggregate |
Unemployment Rate |
Jul |
6.30 |
6.3 |
01-Sep-26 |
Canada |
S&P Global Canada Manufacturing PMI |
Aug |
|
53.5 |
01-Sep-26 |
United States |
ISM Manufacturing |
Aug |
55.20 |
55.6 |
01-Sep-26 |
United States |
ISM Prices Paid |
Aug |
72.00 |
71.1 |
02-Sep-26 |
Canada |
Bank of Canada Rate Decision |
|
2.25 |
2.3 |
03-Sep-26 |
Eurozone Aggregate |
PPI MoM |
Jul |
|
-0.3 |
03-Sep-26 |
Eurozone Aggregate |
PPI YoY |
Jul |
5.00 |
4.6 |
03-Sep-26 |
United States |
ISM Services Index |
Aug |
54.30 |
54.1 |
04-Sep-26 |
Eurozone Aggregate |
Retail Sales MoM |
Jul |
0.30 |
-0.3 |
04-Sep-26 |
Eurozone Aggregate |
Retail Sales YoY |
Jul |
1.10 |
0.7 |
04-Sep-26 |
United States |
Change in Nonfarm Payrolls |
Aug |
55.00 |
-23.0 |
04-Sep-26 |
United States |
Change in Private Payrolls |
Aug |
50.00 |
30.0 |
04-Sep-26 |
United States |
Change in Manufact. Payrolls |
Aug |
5.00 |
5.0 |
04-Sep-26 |
United States |
Average Hourly Earnings MoM |
Aug |
0.25 |
0.1 |
04-Sep-26 |
United States |
Average Hourly Earnings YoY |
Aug |
3.00 |
3.2 |
04-Sep-26 |
United States |
Unemployment Rate |
Aug |
4.10 |
4.1 |
04-Sep-26 |
Canada |
Net Change in Employment |
Aug |
17.50 |
75.1 |
04-Sep-26 |
Canada |
Unemployment Rate |
Aug |
6.40 |
6.4 |
P = Preliminary
The Asset Allocation Team at NEI Investments
Judith Chan, CFA – Vice President, Head of Asset Allocation
Mateo Marks, CFA – Director, Asset Allocation
Adam Ludwick, CFA – Director, Asset Allocation
Anthony Rago, B.A.Sc. – Senior Asset Allocation Analyst