Trudeau Makes Shocking NAFTA Comment; Central Banks and Canadian Job Data in Focus This Week
Published February 5, 2018
On Friday, the greenback surged versus the loonie due to a surprising statement made by Justin Trudeau regarding NAFTA and strong job data in the US, despite a notable drop in the main stock indexes. Trudeau stated that if US proposals proved unreasonable, Canada would not hesitate to leave NAFTA.
The positive US jobs data from Friday showed wages last month recorded their largest annual gain in more than 8.5 years. This data contributed to the sentiment that inflation is picking up, laying some foundation for potentially more aggressive Federal Reserve interest-rate hikes this year. The market is now adjusting to the possibility that the Fed could raise rates four times in 2018 instead of three, as was previously expected.
Central banks will draw some attention this week with key rate decisions from the Reserve Bank of Australia today, Reserve Bank of New Zealand on Wednesday, and the Bank of England on Thursday.
Oil prices started the week in negative territory as traders weighed a steady increase in US output against OPEC’s ongoing efforts to drain the market of excess supply. WTI Crude shed 0.79% to $64.95 per barrel and Brent Crude shed 1.05% to roughly $68.00 per barrel, at time of writing. Fears that rising US output would dampen OPEC’s efforts to rid the market of excess supplies dulled sentiment, according to market participants.
Canada’s job data for January is scheduled for 8:30am EST on Friday. The Canadian economy has seen 17 straight months of job creation, the longest streak since 2000.