From Marc Chandler at Bannockburn Global Forex:
The US dollar is trading higher against nearly all the currencies. Equity markets are mixed and bond yields are lower alongside oil prices. There are two major developments. First, the US and Canada trade talks broke down, and the risk is further escalation. Last week, President Trump has granted Canada a three-day grace period from the 50% tariffs on $20 bln of Canadian goods, even those that were protected by the USMCA saying a deal was struck. Canadian Prime Minister Carney was less sanguine and acknowledged that while progress was made, there were many unresolved issues.
The second development is that US economic sanctions on Iran are intensifying. Treasury Secretary Bessent has an editorial in today’s Financial Times and will hold a press conference later today to explain what the US economic operation will entail. There are not very thinly veiled threats against those who violate the US sanctions. A key question is China’s response, a month before President Xi is to visit Washington and meet with President Trump....
....MUCH MORE
