Weekly Market Pulse - Week ending September 4, 2026
Market developments
U.S. and UK outperforming while Europe and Asia lagged. The primary driver of sentiment was the interplay between geopolitical risk and Federal Reserve rate expectations: U.S.-Iran military exchanges early in the week rattled markets and pushed oil prices sharply higher, stoking inflation concerns.
Fixed Income: Government bond markets endured a volatile week dominated by elevated yields and shifting Fed rate expectations. The U.S. 10-year Treasury yield opened the week at 4.75%, its highest since January 2025, driven by rising oil prices and a hawkish tone from Fed Chair Kevin Warsh, before settling at 4.78% by Friday. The 2-year yield, more sensitive to near-term policy, also rose, spiking as much as 8 basis points intraday on Friday following the payrolls print before partially retracing as attention shifted to next week's CPI and PPI data.
Commodities: Energy markets surged to lead commodity performance for the week, while precious metals ended roughly flat. WTI crude oil jumped over 6.5% to and Brent crude rose ~6.4%, marking the largest weekly gain for crude since July, driven by the U.S.-Iran military exchange and Goldman Sachs warnings of tightening global refining capacity due to strikes on refineries in the Middle East and Russia.
Performance (price return)
SECURITY |
PRICE |
WEEK |
1 MONTH |
3 MONTH |
YTD |
Equities ($Local) |
|
|
|
|
|
S&P/TSX Composite |
36,513.80 |
-0.11% |
1.99% |
3.68% |
15.14% |
S&P 500 |
7,718.60 |
0.09% |
-0.23% |
1.77% |
12.75% |
NASDAQ |
26,506.99 |
0.40% |
-0.29% |
-1.21% |
14.05% |
DAX |
26,046.40 |
-1.97% |
-0.60% |
4.42% |
6.35% |
NIKKEI 225 |
65,020.94 |
-2.09% |
1.66% |
-3.63% |
29.16% |
Shanghai Composite |
3,930.12 |
-0.56% |
2.82% |
-3.15% |
-0.98% |
Fixed Income |
|
|
|
|
|
Canada Aggregate Bond |
240.94 |
-0.29% |
-1.19% |
-1.60% |
0.00% |
US Aggregate Bond |
2340.16 |
-0.16% |
-0.33% |
-0.63% |
-0.37% |
Europe Aggregate Bond |
244.97 |
-0.30% |
-1.06% |
-1.04% |
-0.74% |
US High Yield Bond |
29.91 |
-0.10% |
0.30% |
1.03% |
2.62% |
Commodities |
|
|
|
|
|
Oil |
91.45 |
9.65% |
20.69% |
-1.71% |
59.27% |
Gold |
4430.46 |
-0.55% |
8.64% |
-0.99% |
2.57% |
Copper |
658.05 |
0.28% |
-0.95% |
0.70% |
15.81% |
Currencies |
|
|
|
|
|
US Dollar Index |
99.16 |
-0.54% |
-0.70% |
-0.26% |
0.85% |
Bitcoin (CAD) |
110,460.47 |
2.04% |
22.08% |
24.43% |
-7.93% |
Loonie |
1.3835 |
0.51% |
1.64% |
0.53% |
-0.80% |
Euro |
0.8611 |
0.24% |
0.71% |
0.02% |
-1.13% |
Yen |
156.26 |
2.45% |
0.95% |
2.41% |
0.29% |
Source: Bloomberg, as of September 4, 2026
Central Bank Interest Rates
Central Bank |
Current Rate |
December 2026 |
Bank of Canada |
2.25% |
2.49% |
U.S. Federal Reserve |
3.75% |
3.97% |
European Central Bank |
2.25% |
2.65% |
Bank of England |
3.75% |
4.02% |
Bank of Japan |
1.00% |
1.43% |
Source: Bloomberg, as of September 4, 2026
*Expected rates are based on bond futures pricing
Macro developments
Canada – BoC Holds Steady as Growth Recovers While Labour Market Remains Soft
The S&P Global Canada Manufacturing PMI rose to 54.6 in August, signalling a further expansion in factory activity and extending the sector’s recent recovery. Higher output and new orders pointed to improving domestic demand, although firms continued to cite trade uncertainty and cost pressures as key risks.
The Bank of Canada left its policy rate unchanged at 2.25%, highlighting stronger second quarter growth, improving employment conditions and inflation near 3%. Policymakers noted that elevated energy prices and new trade tensions with the U.S. have increased upside inflation risks, while uncertainty around growth remains high.
Canada’s labour market remained subdued in August, with employment growth modest and the unemployment rate holding at 6.4%. While hiring has improved from earlier in the year, the Bank of Canada continues to view overall labour demand as soft and indicative of lingering excess capacity in the economy.
U.S. – Solid Labour Market Rebound Offsets Moderating Manufacturing Activity
The ISM Manufacturing Index eased to 54.6 in August from 55.6 but remained firmly in expansion territory for an eighth consecutive month. Manufacturing activity continued to benefit from strong production and new orders, while the prices paid component remained elevated at 71.1, signalling persistent input cost pressures.
The ISM Services Index rose to 54.3 in August, indicating continued growth across the larger services sector. The report pointed to resilient business activity and demand, reinforcing the view that the broader U.S. economy remains on a stable expansion path despite pockets of weakness in hiring.
The August employment report surprised to the upside, with nonfarm payrolls increasing by 162,000 and the unemployment rate holding at 4.1%. Private payrolls rose 127,000, manufacturing employment increased by 16,000 and average hourly earnings grew 0.3% month-over-month and 3.1% year-over-year, suggesting labour market conditions remain healthy and potentially complicating the Federal Reserve’s efforts to contain inflation.
International – Eurozone Inflation Accelerates While Consumer Demand Improves
Eurozone inflation accelerated in August, with headline CPI rising 3.3% year-over-year and 0.5% month-over-month, while core inflation remained at 2.5%. The divergence suggests higher energy-related costs are driving the increase in headline prices even as underlying inflation pressures remain relatively contained.
The Eurozone unemployment rate edged up to 6.4% in July, pointing to a slight softening in labour market conditions. While employment remains relatively resilient, the uptick suggests slowing momentum as the region navigates higher inflation and tighter financial conditions.
Producer prices continued to rise on an annual basis in July, reflecting ongoing upstream cost pressures, though monthly price dynamics remained subdued. At the same time, retail sales increased 0.3% month-over-month and 1.1% year-over-year, indicating consumer spending is holding up despite the inflation backdrop.
Quick look ahead
DATE |
COUNTRY / REGION |
EVENT |
|
SURVEY |
PRIOR |
07-Sep-26 |
Eurozone Aggregate |
GDP SA QoQ |
2Q T |
0.40 |
0.4 |
07-Sep-26 |
Eurozone Aggregate |
GDP SA YoY |
2Q T |
1.00 |
1.0 |
08-Sep-26 |
China |
PPI YoY |
Aug |
3.60 |
3.5 |
08-Sep-26 |
China |
CPI YoY |
Aug |
0.85 |
0.5 |
10-Sep-26 |
Eurozone Aggregate |
ECB Deposit Facility Rate |
|
2.50 |
2.3 |
10-Sep-26 |
Eurozone Aggregate |
ECB Main Refinancing Rate |
|
2.65 |
2.4 |
10-Sep-26 |
Eurozone Aggregate |
ECB Marginal Lending Facility |
|
2.90 |
2.7 |
10-Sep-26 |
United States |
PPI Final Demand MoM |
Aug |
0.40 |
|
10-Sep-26 |
United States |
PPI Ex Food and Energy MoM |
Aug |
0.30 |
0.2 |
10-Sep-26 |
United States |
PPI Final Demand YoY |
Aug |
5.20 |
4.7 |
10-Sep-26 |
United States |
PPI Ex Food and Energy YoY |
Aug |
4.60 |
4.2 |
10-Sep-26 |
Japan |
PPI MoM |
Aug |
|
0.1 |
10-Sep-26 |
Japan |
PPI YoY |
Aug |
7.40 |
7.2 |
11-Sep-26 |
United States |
CPI MoM |
Aug |
0.40 |
0.1 |
11-Sep-26 |
United States |
Core CPI MoM |
Aug |
0.20 |
0.2 |
11-Sep-26 |
United States |
CPI YoY |
Aug |
3.40 |
3.4 |
11-Sep-26 |
United States |
Core CPI YoY |
Aug |
2.40 |
2.5 |
11-Sep-26 |
United States |
CPI Index NSA |
Aug |
334.96 |
333.9 |
11-Sep-26 |
United States |
Core CPI Index SA |
Aug |
337.67 |
336.8 |
T = Third
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