CANADA: Politics Week: Trudeau Struggles To Tackle Trump's Economic Force Threat
Jan-13 16:10
- Prime Minister Justin Trudeau last Monday said he will resign March 24 to allow for a Liberal leadership race, also hanging on to deal with Donald Trump's threats of a 25% tariff and use of "economic force" after taking office Jan. 20.
- Trudeau Thursday was in Washington for Jimmy Carter's funeral but appeared to have no meetings with lawmakers or the President-elect. He called a press conference late that day but took no questions, and scheduled no public events Friday or today.
- Trudeau suspended Parliamentary business until his resignation, short-circuiting opposition parties who intended to force a snap election when the legislature had been due to open Jan. 27.
- Leadership vote is March 9. Foreign Minister Melanie Joly and Finance Minister Dominic LeBlanc and Anita Anand aren't running while former minister Chrystia Freeland and former BOC/BOE Governor Mark Carney are expected to compete. Other potential candidates include industry minister Francois-Phillipe Champagne and resources minister Jonathan Wilkinson.
- Polling aggregator 338Canada shows Conservatives likely to win majority government if election were held now.
- Sample headlines: The great pretender: Looking back at Trudeau, we see our initial judgment of him when he first entered politics was correct (Globe and Mail); Trudeau’s Long Premiership Was Hollow at the Core (Foreign Policy Magazine); PM Trudeau says he thinks Trump is using talk of Canada becoming 51st state to distract from tariff impact (CTV News).
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
Dec-13 21:13
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
Dec-13 21:00
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
Dec-13 20:40
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
