China Vice Premier Liu He spoke by phone with US Trade representative Lighthizer and after agreeing to talk again in two weeks the US announced that some consumer facing goods would be exempt until December 15. The 10 percent increase still remains for articles published on the list on May 17, which will take effect on September 1. Safe havens fell as soon as the news of the exemptions hit the wires. The JPY fell 1.25 percent and the CHF lost 0.41 percent. Gold traded 0.52 percent lower after the US announced that most of the consumer goods in the list would not be hit by the September 1 tariffs. Equities surged with the news as the prolonged trade war has been the biggest negative factor hitting stocks. The consumer facing piece of the tariff … [Read More...]

The Canadian dollar rose 0.14 percent on Friday to cap a volatile week that left the loonie back to where it started on Monday. The Canadian currency was pressured downward by rising trade war concerns, but as the week went by some of the anxiety went down sapping the momentum out of the US dollar. The loonie was able to brush off a larger than expected number of job losses (24,200) and a higher unemployment rate (5.7 percent) and is trading at 1.3206 slightly higher than the start of the Asian session on Monday. Next week in the Canadian economic calendar will be quiet with only the ADP payroll data and foreign securities purchases on Thursday and Friday respectively. US inflation and the ongoing saga of trade headlines … [Read More...]

Summer doldrums are unlikely to take place as investors keep a close on eye on the trade front and if continued economic data deterioration will prompt central banks aggressive call for action.  It appears the PBOC is set on a slow devaluation of the yuan, while the US is set to deliver the nightmare scenario on tariffs on September 1st.  The Trump administration is expected to become more vocal about the currency manipulation and we could hear more threats about devaluing the dollar, even though it would be unsuccessful unless it was a coordinated effort with other central banks, which is extremely unlikely. Expectations for a trade to happen this year have quickly faded away with many jumping on the camp that thinks it will occur after … [Read More...]