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 .