Is NAFTA At A Turning Point?

The high-tension trade environment continues today with Canadian Foreign Affairs Minister Chrystia Freeland headed to Washington to resume NAFTA talks. As a consummate politician, Ms. Freeland merely confirmed that we were at a decisive point in the saga. Although the United States has shown openness toward the automobile sector, Canada appears less willing to make concessions regarding its dairy and poultry industries.

However, a lesson can be taken from market unpredictability, as exemplified by the major turnaround on North American stock exchanges when at this time yesterday all signs were pointing to a meltdown. If you have the impression that you no longer understand what is going on with markets, you’re not alone. Comments yesterday by U.S. Federal Reserve committee member James Bullard that he did not consider further key rate increases necessary should have sent the greenback into a nosedive. It’s possible that the fact that Bullard is a non-voting member this year reduced the impact of his remarks somewhat.

Bullard does appear to speak for all parties involved, however, in describing the trade war between China and the United States as a great source of uncertainty that could significantly affect the economic outlook.

Stéphane Goulet

Range of the day: 1.2725 – 1.2845

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