Summary

• The effective closure of the Strait of Hormuz disrupted the flow of a meaningful share of global commodity supply, including oil, natural gas, fertilizers, and other inputs.
• Futures markets now price multiple rate hikes this year from both the Bank of England and the European Central Bank.
• Capital spending plans of the largest tech companies continued to top investor expectations, while software companies fell over 20% on concerns around AI business model disruption.
• Across the quarter, the 2-year Treasury yield increased 32 basis points to 3.79% while the 10-year yield gained 15 bps to 4.32%, resulting in a flatter Treasury curve overall.
• Northern Funds Limited Term U.S. Government underperformed its benchmark during the quarter ending 31st March 2026, primarily driven by fees and marginal detraction from U.S. TIPS exposure.

The first quarter was defined less by realized macroeconomic outcomes than by a reassessment of risks. Economic momentum entering the quarter was reasonably constructive, and published consensus estimates for trend-like global growth and manageable inflation largely remained