Global markets enter the new week facing a familiar but increasingly consequential tension: escalating geo-economic and security rhetoric on the one hand, and a macroeconomic backdrop that continues to deliver resilience on the other.

Canadian Prime Minister Mark Carney’s call for “variable geometry” alliances, aimed at supply-chain resilience and energy security rather than fixed political alignment, underscored a growing willingness among middle powers to diversify economic relationships. US President Trump’s subsequent threat to impose 100% tariffs on Canada, should Ottawa ratify a trade agreement with China, marked a sharp escalation in tone. The week was also marked by the escalation and subsequent de-escalation between the US and Europe over Greenland’s sovereignty, which at one point threatened to unleash a trade war between the two blocs.

Energy markets will remain in the spotlight. Oil traders will monitor any concrete follow-through on Iran sanctions enforcement and signals from OPEC+ members, while natural gas markets remain highly exposed to weather risks. The recent spike in US gas prices, driven by an extreme winter storm, underscores how quickly fundamentals can overwhelm broader macro narratives when supply-demand balances tighten.

Macro data and policy signals will also shape near-term commodity pricing. The Federal Reserve is widely expected to hold rates steady this week, but guidance from Chair Powell will be closely scrutinized. With inflation running in line with expectations and US growth surprising to the upside, markets have priced out near-term rate cuts. For commodities, this keeps the dollar, real rates, and broader liquidity conditions firmly in focus. A reaffirmation of a restrictive stance could cap upside in cyclical commodities, while any hint of renewed flexibility would likely support energy and industrial metals.

Outside the US, Europe’s GDP and inflation data will help clarify whether the recent stabilization in activity is gaining traction, with implications for gas demand and power markets. China’s manufacturing PMI will be equally important, as confirmation of improving momentum would support base metals and bulk commodities, reinforcing the IMF’s upgraded global growth outlook for 2026.