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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

Canadian Economy Rebounds, Trump Extends Exemptions

Published May 1, 2018
  • President Trump is extending the steel tariff exemptions on the EU, Canada, and Mexico until June 1st to allow further talks. An agreement, in principle, has been reached with Australia, Brazil, and Argentina, with details to be “finalized shortly.” This decision comes ahead of Treasury Secretary Steve Mnuchin’s visit to China.
  • Oil jumped to fresh multi-year highs yesterday as Israel’s PM Netanyahu said “Iran lied about never having a nuclear weapons program” and “after signing the nuclear deal in 2015, it intensified its efforts to hide its nuclear files.” Many analysts agree that while there was nothing particularly relevant regarding the statements, it could serve as a major catalyst for President Trump abandoning the Iran deal. The re-imposition of US sanctions and the lack of a substantial or immediate supply response from either the US or Saudi Arabia means that little will stand in the way of crude oil prices approaching the $80/bbl mark.
  • A significant market moving event could occur this afternoon at 2:30pm EST when Poloz will speak at the Yellowknife Chamber of Commerce on the topic ‘Canada’s Economy and Household Debt: How Big Is the Problem?’. This issue is at the heart of the BOC’s economic concerns and should be watched quite closely.
  • Canada’s economy rebounded more than forecast, as outputs came in at 0.4% versus 0.3%, a very welcome sign that the nation is prepared to emerge from recent, soft economic growth. Gains were mainly attributed to oil and auto production coming back on line.