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NAFTA Talks Stall Over Auto Debate; USD/CAD Down Ahead of US Inflation Data

Published May 10, 2018
  • NAFTA talks have made little progress this week as Mexico and the US continue to spar over key issues on automobile trade; in a direct affront to Mexican manufacturers. the US is demanding that certain percentage of auto parts be made in high wage regions.
  • The US is also pushing for higher North American content for autos. Mexico has responded in turn with counter-proposals, while Canadian Foreign Minister Chrystia Freeland noted productive talks that were independent of this.
  • The slow nature of these talks is causing concern that the NAFTA re-negotiation will not be completed before Mexican elections next month; if talks are not resolved, NAFTA is speculated to become a key election issue for Mexico.
  • The US Consumer Price Index, the market’s preferred metric for inflation, is set to be released at 8:30 AM EST; new data on US unemployment claims will also be released at the same time.
  • Month-on-month growth in Canada’s New Housing Pricing Index will released at 8:30 AM EST; markets will look for improvement over last month’s 0 percent growth .