MACRO ANALYSIS: MNI US Macro Weekly: IEEPA's Dead, But Tariffs Will Live On

• RES 4: 1.4023 76.4% retracement of the Nov 5 - Dec 26 bear leg     
• RES 3: 1.3977 High Dec 4
• RES 2: 1.3950 61.8% retracement of the Nov 5 - Dec 26 bear leg 
• RES 1: 1.3856/3929 50-day EMA / High Jan 16
• PRICE: 1.3821 @ 17:17 GMT Jan 21
• SUP 1: 1.3786 Low Jan 21
• SUP 2: 1.3752 Low Jan 6 
• SUP 3: 1.3701 Low Jan 2 
• SUP 4: 1.3643 Low Dec 26 and the bear trigger

The latest move down in USDCAD appears corrective - for now. However, price has breached support at the 20-day EMA, at 1.3839. The clear break of this EMA highlights a stronger reversal and signals scope for a deeper retracement - towards 1.3752, the Jan 6 low. Key short-term resistance and the bull trigger has been defined at 1.3929, the Jan 16 high. A move through this hurdle is required to reinstate the recent bull theme.   

• Sentiment improved late Wednesday after Trump said he would not use force to acquire Greenland in Davos address -- extended highs late (but still lower for the week) after Pres Trump posts on social media he has a "framework for future deal on Greenland with NATO" adding he "won't impose Greenland-linked tariffs on Feb 1".
• Earlier, Bloomberg reported that Danish Foreign Minister Lars Lokke Rasmussen has rejected any talks over a US takeover of Greenland, in doorstep remarks to reporters at the World Economic Forum.
• Risk-on as stocks extended highs (but still lower for the week), Gold traded in the red briefly (4,756.12) after climbing to record high of 4,888.12 earlier as geopol tensions cooled briefly.
• Treasuries look to finish near late session highs, TYH6 +8 at 111-21.5 vs 111-22 high, 10Y yld -.0418 at 4.2508%, Curves bull flatten: 2s10s -3.571 at 65.790, 5s30 -1.284 at 104.498.
• While bonds led the late rally, projected rate cut pricing cooled vs. late Tuesday levels (*): Jan'26 steady at -1.2bp, Mar'26 at -4.7bp (-6.1bp), Apr'26 at -8.7bp (-10.7bp), Jun'26 at -19.2bp (-21.7bp).
• Prediction market-implied probability of Gov Cook leaving office by end-year have fallen to 18% from 29% (on Kalshi) during the government's oral arguments for the President's power to fire the Fed official. There appeared to be skepticism among multiple officials including Justices Gorsuch and Barrett.
• Looking ahead to Thursday, focus on Weekly Claims, GDP, PCE, 10Y TIPS Sale. 

The Atlanta Fed's GDPNow estimate for Q4 returned to the 5.4% handle Wednesday after this morning's construction data, at 5.41% Q/Q SAAR after 5.27% prior. 

• As previously noted the improvement is due largely to the September/October construction figures: GDPNow estimates upgraded Q4 residential construction growth - in real terms - to -1.0% Q/Q SAAR vs -5.7% in its prior estimate, but nonresidential structures pulled back to -1.9% from -0.4%. (Residential posted -5.2% and nonresidential -6.3% in Q3).
• GDPNow last exceeded 5.4% for the quarter on Jan 8 after monthly trade data. On net the latest estimate still implies final domestic demand (ex-net exports/inventory changes) growing at a more typical 2-3% clip, but still solid growth.