US: US Commerce Secretary Hints At Tariff Relief For Mexico & Canada
Headlines have crossed from a Fox News interview with US Commerce Secretary Howard Lutnick. They hint at some form of relief from the recently announced tariffs on Mexico and Canada, although more details are likely needed.
Reuters noted: "U.S. Commerce Secretary Howard Lutnick told Fox Business on Tuesday that President Donald Trump will reach a middle ground with Canada and Mexico on tariffs and an announcement to that effect was expected on Wednesday."
BBG added: "*LUTNICK SAYS TRUMP CONSIDERING RELIEF FOR USMCA-COMPLIANT GOODS" - BBG, along with "*LUTNICK: TRUMP MAY ROLL BACK CANADA, MEXICO TARIFFS TOMORROW" - BBG.
- Both CAD and MXN have rallied against the USD, with USD/CAD back sub 1.4400, while USD/MXN got back under 20.50, but sits slightly higher now. US yields have risen to session highs, the 10yr back close to 4.25%. We were near 4.20% as these headlines started to cross.
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ASIA: Coming Up In The Asia-Pac Session On Monday
| 2200GMT | 0600HKT | 0900AEDT | Australia Jan S&P Global PMI Mfg |
| 2300GMT | 0700HKT | 1000AEDT | South Korea Dec Industrial Production |
| 2350GMT | 0750HKT | 1050AEDT | Japan BOJ Summary of Opinions (Jan. MPM) |
| 0000GMT | 0800HKT | 1100AEDT | Australia Jan Melbourne Institute Inflation |
| 0030GMT | 0830HKT | 1130AEDT | Japan Jan Jibun Bank PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | South Korea Jan S&P Global PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Australia Jan ANZ-Indeed Job Advertisements |
| 0030GMT | 0830HKT | 1130AEDT | Australia Dec Retail Sales |
| 0030GMT | 0830HKT | 1130AEDT | Australia 4Q Retail Sales Ex Inflation |
| 0030GMT | 0830HKT | 1130AEDT | Australia Dec Building Approvals |
| 0110GMT | 0910HKT | 1210AEDT | Japan Rinban Operations |
| 0145GMT | 0945HKT | 1245AEDT | China Jan Caixin PMI Mfg |
ASIA: Coming Up In The Asian Session On Monday
| 2300GMT | 0700HKT | 1000AEDT | South Korea Dec Industrial Production |
| 0030GMT | 0830HKT | 1130AEDT | Malaysia Jan S&P Global PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | South Korea Jan S&P Global PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Taiwan Jan S&P Global PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Indonesia Jan S&P Global PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Thailand Jan S&P Global PMI Mfg |
| 0030GMT | 0830HKT | 1130AEDT | Philippines Jan S&P Global PMI Mfg |
| 0145GMT | 0945HKT | 1245AEDT | China Jan Caixin PMI Mfg |
| 0400GMT | 1200HKT | 1500AEDT | Indonesia Jan CPI |
| 0500GMT | 1300HKT | 1600AEDT | India Jan HSBC PMI Mfg |
| 0730GMT | 1530HKT | 1830AEDT | Thailand Jan Business Sentiment Index |
| 0830GMT | 1630HKT | 1930AEDT | Hong Kong Dec Retail Sales Value |
| 0830GMT | 1630HKT | 1930AEDT | Hong Kong 4Q GDP |
FOREX: USD Surges At Monday Open On US Tariff Implementation
Early Monday G10 FX trends are heavily favored for the USD, following the weekend tariff announcements from the US administration. The weekend announcement will see 25% tariffs levied on Mexico and Canada, along with 10% on China, starting this Tuesday (see this BBG link). Tariffs on Canada energy exports will be set at a lower 10%.
- Canada has already detailed retaliation plans, which will be done in two phases. Firstly on around on around C$30bn worth of US exports, then a larger product list in a few weeks (around C$125bn per BBG). Mexico and China have vowed a response, but have yet to release any specifics.
- USD/CAD spiked to fresh highs, 1.4749, but was last 1.4725/30. This was fresh highs back to 2003. EUR/USD is also down over 1%, last 1.0240 (earlier lows were 1.0141.
- AUD/USD is at 0.6155/600, slightly up from session lows. We are off 1%, while NZD/USD is down 0.90%, to 0.5580/85.
- USD/CNH is up to 7.3600, 0.50% weaker in CNH terms.
- Yen is outperforming, likely on safe haven related demand. USD/JPY was last sub 155.00, the only G10 currency firmer against the USD so far today.
