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Global Asset Allocation Viewpoints

A view from Canada

April 2026

Outlook

Continued conflict in the Middle East and energy supply shock threaten higher inflation and weaker growth, particularly in energy-import dependent economies.
Despite elevated risk to growth and inflation, earnings momentum and economic growth still remain favorable, underpinned by accommodative fiscal policies across many regions.
U.S. economic growth continues to show resilience driven by AI-driven capex, consumer spending and supportive fiscal policy; however, weakness in the labor market warrants monitoring.
Markets outside the U.S. have been benefitting from firmer domestic demand and policy, where fiscal initiatives and improving corporate profitability are supportive. Sustained higher energy prices pose a risk.
Key risks to global markets include escalating geopolitical tensions, a resurgence in inflation, reliance on AI-driven growth, further deterioration in labor markets, and a widening of liquidity concerns within private credit.

Geopolitical tensions and energy supply disruptions are adding complexity to today's market environment. Beneath the headlines, however, shifts in fundamentals and sector leadership may be creating selective opportunities for investors.
T. Rowe Price is neutral on equities overall, overweight small-caps and real assets, and sees Canadian equities as supported by more attractive valuations after weakness in gold and software. In fixed income, Canadian investment grade remains underweight as stronger growth and issuance may pressure rates.

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A view from Canada

Global Asset Allocation Viewpoints

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