CANADA PERSPECTIVE

Ottawa, May 28, 2026. Canadian press deciphers the US-Iran escalation through an economically resolute prism, without neglecting the strategic dimension imposed by the alliance with the United States. The May 28 exchanges of strikes — the most violent since the April ceasefire took effect — immediately reacted on the markets: Brent surged by 4.2% to approach $98 a barrel, recalling how the closure of the Strait of Hormuz, which handled about a fifth of the world's oil and liquefied natural gas in peacetime, weighs on the Canadian economy.

The Financial Post, citing Bloomberg, notes that US 10-year Treasury yields rose by five basis points to 4.53% in Asia following the strikes, signaling a relaunch of inflationary pressures that central banks, including the Bank of Canada, believed were being absorbed. Ken Crompton, National Australia Bank's head of interest rate strategy, directly cites the Iranian attack on a US base as "the most probable factor" of the correction. The same newspaper notes that gold fell to a two-month low — around $4,365 an ounce — a counterintuitive signal betraying a forced sale of assets in a context of rising US dollar.

On the diplomatic front, Global News and the Toronto Sun map a negotiation in tatters. Trump, who had announced on Saturday a deal "largely negotiated," posted on Truth Social on Sunday that he was "not in a hurry" to conclude and that the US blockade of Iranian ports would remain "fully in effect" until a certified text was signed. The Globe and Mail specifies that the memorandum envisaged a 60-day extension of the ceasefire, but that Tehran considers Washington guilty of obstruction on essential clauses, including the release of Iranian assets. US Secretary of State Marco Rubio, visiting New Delhi, acknowledged "significant but not definitive progress," insisting on three non-negotiable US demands: renunciation of nuclear arms, long-term restrictions on uranium enrichment, and removal of already stored highly enriched uranium.

In this context, Canada finds itself caught between its automatic solidarity with Washington — a US base in Kuwait targeted by an intercepted Iranian missile — and the domestic repercussions of a prolonged oil shock. The Financial Post warns that even a peace deal would not quickly erase the pressure on energy prices, forcing central banks to maintain high interest rates "longer than expected before the war," delaying the expected cuts. For Canadian households already weakened by five years of inflation above target, the prospect of a new energy spiral fuels anxiety that Toronto media convey without hesitation.