FED: Analysts' "On Hold" Rate Calls For 2025 Evaporate Post-Jackson Hole (1/2)

Speaking in Prince Edward Island, PM Mark Carney says that trade talks with the US "are at an intense phase". Says that "any trade deal with the US must be on fair terms for Canada." Adds that a trade deal with the US "without any tariffs is not likely." Carney: "That said, there's a question as to how large those tariffs would be." 

• Asked about US President Donald Trump's comments about the difficulty of negotiating a deal with Canada, Carney says, "Yes, we are difficult, but we are fighting for Canada."
• Says that US comments regarding Canada not being a priority in trade talks are "part of the negotiation."
• Former White House official Larry Haas, speaking to CTV on 27 July, said that the gov't in Ottawa needs to remain robust, “Canada needs to make clear to the United States that it’s not going to take just any deal.”
• With Canada risking an escalation in tariffs to 35% from 1 August, reaching a deal in the coming days will be of the highest priority for the Carney gov't, despite efforts to downplay the risks to Canadian growth from such high levies. 

No clear, fresh fundamental driver for the latest extension higher in the USD, with gold lower and S&P 500 e-minis closing the Asia-Pac opening gap higher. Meanwhile, benchmark European equity indices remain under pressure.

• U.S. President Trump has reiterated his ability to implement tariffs, earmarking a 15-20% “world tariff” range (in line with levels levied in recent negotiations), while shortening the deadline for Russia to agree a ceasefire truce with Ukraine (to 10-12 days from now).
• Elsewhere, there hasn’t been much in the way of negatives surrounding the Sino-U.S. trade meeting in Stockholm, although that only got underway this afternoon.
• On net, it looks like the watering down of some of the recent headwinds for the USD, along with Trump’s softening tone when it comes to the immediate future of Fed Chair Powell, is allowing some of the USD negativity unwind.
• Still, the broader USD (BBDXY) only trades back to levels that were registered last Monday.
• EUR/USD remains under the most pressure despite the U.S.-EU trade agreement, with the deal still deemed punitive enough to harm to EU, despite the avoidance of the worst-case scenario.
• EUR/USD registers lows of 1.1626, still some way above next support at the 50-day EMA (1.1559). a break there would pose a bigger threat to the bullish case in the pair. 

No clear, fresh fundamental driver for the latest extension higher in the USD, with gold lower and S&P 500 e-minis closing the Asia-Pac opening gap higher. Meanwhile, benchmark European equity indices remain under pressure.

• U.S. President Trump has reiterated his ability to implement tariffs, earmarking a 15-20% “world tariff” range (in line with levels levied in recent negotiations), while shortening the deadline for Russia to agree a ceasefire truce with Ukraine (to 10-12 days from now).
• Elsewhere, there hasn’t been much in the way of negatives surrounding the Sino-U.S. trade meeting in Stockholm, although that only got underway this afternoon.
• On net, it looks like the watering down of some of the recent headwinds for the USD, along with Trump’s softening tone when it comes to the immediate future of Fed Chair Powell, is allowing some of the USD negativity unwind.
• Still, the broader USD (BBDXY) only trades back to levels that were registered last Monday.
• EUR/USD remains under the most pressure despite the U.S.-EU trade agreement, with the deal still deemed punitive enough to harm to EU, despite the avoidance of the worst-case scenario.
• EUR/USD registers lows of 1.1626, still some way above next support at the 50-day EMA (1.1559). a break there would pose a bigger threat to the bullish case in the pair.