Canada GDP rose 0.3% mom in April, above expectation of 0.2% mom. Goods-producing industries rose 0.4%, while services producing industries increased 0.2%. The 20 industrial sectors were nearly evenly split between gains and losses. On three-month rolling basis, GDP grew 0.3%, up from 0.1% in the three months to March.
Also from Canada, IPPI rose 0.1% mom in May versus expectation of 0.0% mom. RMPI dropped -2.3% mom, versus expectation of -3.0% mom.
USD/CAD dips mildly after the releases. Focus remains on 1.3068 cluster support (38.2% retracement of 1.2061 to 1.3664 at 1.3052). Decisive break should confirm medium term bearish trend reversal.
Canada Freeland: With steel tariffs in place, ratification of USMCA would be very, very problematic
Despite all the talks and rumors that the US is close to lifting steel and aluminum tariffs on Canada and Mexico, Canadian Foreign Affairs Minister Chrysita Freeland left no hints on the progress after she met US Trade representative Robert Lighthizer yesterday.
Freeland acknowledged that there were discussions regrading the tariffs but and details were provided. Instead, she just noted “Canada believes in the new [USMCA] agreement that we reached with the United States and Mexico,” and “we very much hope it can be ratified in all of our countries, although the domestic processes are up to each country.” She emphasized, “when it comes to Canada, it is certainly the case for us that as long as the tariffs remain in place, ratification would be very, very problematic.”
Mexico’s chief North American trade negotiator Jesús Seade said earlier this week “Very quickly we have made a tremendous progress and I’m looking to an early resolution on the basis of lifting the tariff, no quotas. We were getting close to an agreement.” Mexican Secretary of Economy Graciela Márquez Colín also said “if we get similar proposals we might go into a trilateral, but that’s just a possibility”. But Freeland said she would “leave it to the Mexicans and the Americans to comment.”
US Treasury Secretary Steven Mnuchin told a Senate Committee yesterday that “the president has instructed us to try to figure out a solution” on steel and aluminum tariffs.” And, “this is a very important part of passing USMCA which is a very important economic agreement for two of our largest trading partners… I think that we are close to an understanding with Mexico and Canada. I’ve spoken to the finance ministers. Ambassador Lighthizer is leading the effort on this, but I can assure you it is a priority of ours.”