Only five vessels crossed the Strait of Hormuz in the twenty-four hours ending Friday evening, four outbound and one inbound, against a pre-crisis baseline of roughly 140 vessels a day. Iran’s Revolutionary Guard Corps said it struck two oil tankers attempting the crossing under United States air escort, and four more turned back before reaching the strait.
The TSX Composite fell 279.70 points to 35,226.14 the same day. Neither the tanker strikes nor the bond market’s worst week since 2007 explains why.
The Traffic Collapse the Reassurance Story Missed
Through most of July, the recovery in Hormuz shipping was the story. Weekly average traffic through the strait had climbed back to roughly 30 to 35% of pre-war levels, still a severe structural deficit against the 24 million barrels a day that transited before hostilities began in February, but directionally the right way. WTI tracked that optimism down to $68.78 by early July before Houthi attacks widened the conflict into the Red Sea and pushed the benchmark to $92.19 by July 23.
Friday broke the pattern in the other direction. The IRGC said the two struck tankers were operating under American air escort on a route Tehran calls unauthorized, and four accompanying vessels changed course. Kpler ship-tracking data confirmed two very large crude carriers did exit the strait successfully the same day, the kind of detail that makes this week harder to read than a simple closure. WTI settled at $85.47, up 2.3%, extending July’s advance past 20%, the sharpest monthly gain since March.
WTI’s round trip from a late-June low near $69 to Friday’s close traces the month’s structural break, with the Red Sea escalation and Friday’s tanker strikes marking the two points where the war premium reasserted itself.
WTI fell to a late-June low near $69 before Red Sea escalation pushed it to $92.19 by July 23, eased through the diplomatic pause that followed, then rallied again after Friday’s claimed tanker strikes. Data reflects daily futures closes compiled from Investing.com and Oilprice.com.
A Selloff That Was Not About Iran or Oil
The TSX decline traced to two names that had nothing to do with the Strait of Hormuz. Telus fell 11.27% to a five-year low of $13.38 after cutting its full-year outlook, the worst performer on the index by a wide margin. Gold miners were the other drag, off more than 2% sector-wide as spot gold fell 1.47% to $4,042.97 and silver dropped 2.35%, both pressured by a firmer US dollar and rising Treasury yields.
That is the detail worth sitting with. Oil rose because the war escalated. Gold, the instrument that is supposed to rise when the war escalates, fell in the same session, and the index-level pullback tracked gold’s move rather than oil’s.
Friday’s five biggest cross-asset moves split unevenly, with WTI’s gain sitting almost alone against a TSX, gold and silver that all moved the same direction for unrelated reasons.
Gold and silver fell alongside the TSX Composite on US dollar strength and rising Treasury yields, while WTI rose on the Hormuz tanker strikes. USD/CAD was roughly flat on the session despite the divergence elsewhere.
Warsh’s Bond Market Problem Is Now Canada’s Problem Too
The week’s other break came from Washington, not Tehran. Federal Reserve Chair Kevin Warsh held the policy rate at 3.50% to 3.75% for a seventh consecutive month on Wednesday, with three committee members dissenting in favour of a hike, the most hawkish split of his tenure. Warsh told reporters there is no soft inflation target, and said he would rather let markets react to data than to Fed guidance.
The bond market took him at his word and did not like what it heard. The 30-year Treasury yield surged past 5.2%, its highest level since 2007, and the 10-year climbed toward 4.70%, its highest since January 2025. Three dissents and a chair who has stopped offering forward guidance left long-end yields to do the Fed’s talking, and they said the market is not convinced inflation is under control.
Canada felt the spillover directly. The Government of Canada five-year yield rose to 3.26% Friday, up seven basis points on the session and roughly 20 basis points higher than a month ago, even as the Bank of Canada held its own rate at 2.25% for a sixth consecutive meeting and June’s inflation print eased to 2.8%. The BoC has room to be patient. The five-year yield, the one that prices fixed mortgage renewals, does not have that same luxury while US long-end yields keep climbing.
The Canadian dollar has been the one asset that priced the oil rally the way the textbook says it should all month. USD/CAD eased to 1.4013 by Friday, close to a one-month high for the loonie and down from a two-week low of 1.42 hit just before Wednesday’s Fed decision, even as the broader US Dollar Index held roughly flat on the session. That is oil doing what oil is supposed to do for a resource currency. It is also the one thread in this week’s data that lines up with the headline story instead of against it.
What Monday Actually Prices In
None of Friday’s three breaks showed up in the same place. The equity market repriced Telus and gold miners. The bond market repriced Warsh’s credibility. The oil market repriced a war that most of July’s traffic data said was fading. Only the Canadian dollar priced the actual geopolitical story in a way that matched the headlines.
A portfolio built on any single one of last week’s reassuring narratives, easing Hormuz traffic, a patient Bank of Canada, contained volatility, is carrying more risk into August than the TSX’s 0.79% Friday decline would suggest. The renewal conversation and the Telus conversation are worth having before Monday’s open, not after it.