The euro will be on full display this week with quite a few risk events taking place from now to Sunday. It will all start with a speech from Mario Draghi today. There is a chance that he discusses monetary policy, although most investors believe that his only focus will be on developments in Latvia’s central bank crisis.
Mexico, Canada, and the US aim to finish reworking less contentious chapters of the NAFTA trade deal in new talks that began yesterday in Mexico City, hoping to clear the path for a breakthrough on the toughest issues. While pledging to stay in the talks, Canada’s chief negotiator, Steve Verheul, struck a downbeat tone last week, telling a business audience: “There are large gaps between what we’re trying to achieve and what the US is trying to achieve.”
Oil prices are down slightly on the day with Brent crude down ~0.37% and WTI crude down ~0.30%, trading at $67.75 and $63.55/barrel, respectively, at time of writing.
The US Federal Reserve will draw some attention this week as new Chair Jerome Powell testifies before the House of Representatives’ Financial Services Committee tomorrow, one day earlier than expected. Investors will be listening closely to his views on the state of the economy and any clues about interest rates being raised faster than expected.
This week could prove to be an interesting one for the loonie when the Federal Budget takes center stage tomorrow. Risks to the Canadian dollar are that the focus is on soft issues and new spending initiatives the PM wants to campaign on going into next year’s election vs meaningful measures to boost economic competitiveness.