August 2026 – Higher oil prices revive inflationary pressures

Volatility increased on global financial markets in August. Higher oil prices, fuelled by the conflict in the Middle East, revived inflation concerns and increased the likelihood of monetary tightening. The Canada-U.S. trade war added to the uncertainty, as tariff-related tensions between the two countries escalated during the month. Despite this backdrop, most stock markets performed well, supported by a resilient global economy and a strong quarterly earnings season. 

As for the bond markets, they came under increasing pressure on expectations that interest rates could remain high for some time, a sentiment reinforced by Federal Reserve Chair’s hawkish Jackson Hole speech.