President Ursula von der Leyen used the State of the Union address to extend a landmark invitation to Canada to become the European Union’s first “Associate Member,” saying she will work with Prime Minister Carney to make the status possible. Canada’s leader is set to address the European Parliament tomorrow as Brussels explores deeper institutional ties with Ottawa.
The EU also unveiled plans for a strengthened defence posture, including proposals for a revamped Security Council as part of a broader strategy to bolster collective security — a move reflecting growing concern about geopolitical fragmentation and regional threats.
Markets are navigating the political developments against a backdrop of persistent rate pressure. The US 10‑year Treasury yield closed above 5% yesterday, a level not seen in years, and US equities suffered their sixth decline in seven sessions as investors weighed the implications for growth and corporate borrowing costs.
Risk assets in Europe showed resilience: regional stocks rose about 0.5%, led by financials, as investors digested the policy shifts and a potentially firmer euro‑area macro outlook. In Asia, Tokyo and Shanghai each gained around 0.7%, while Hong Kong was little changed.
Macro and policy notes added to the market conversation. The European Central Bank projects euro‑area wage growth will accelerate in 2027, a signal that core inflation pressures may broaden over the medium term. Separately, Bloomberg reports OpenAI is considering a fresh funding round that could value the company at roughly $1.2 trillion, underscoring investor appetite for AI assets even as broader markets face rate-induced headwinds.
Ahead of the Federal Reserve’s policy decision, US futures point to a mildly positive open. Brent crude eased to about $107 a barrel, trimming some commodity‑linked inflation concerns but leaving bond markets and equity sentiment on edge as central bankers and investors parse the outlook for rates and growth.
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