NATO: US' Rubio-Needs To Be A Plan B If Iran Doesn't Re-Open Strait Of Hormuz

Reuters reports comments from Canadian PM Mark Carney regarding the upcoming review of the US-Mexico-Canada (USMCA) trade agreement, due to get underway on 1 July. Carney says that the review "will take some time", and "this is not a case where the United States will simply dictate terms for the review." The PM's comments come as US Trade Representative Jamieson Greer is due to appear before the US House of Representatives' Ways and Means committee at the top of the hour to answer questions on the Trump administration's trade strategy in 2026 (livestream). 

• Greer met with Mexican President Claudia Sheinbaum and Economy Minister Marcelo Ebrard in Mexico City earlier in the week to discuss the USMCA. This served as a precursor to a round of bilateral talks starting next week. Following these talks, Greer is due to give notice to Congress on whether the White House will look to amend the treaty (as is expected).
• On 21 April, Carney announced the advisory committee on Canada-US economic relations would be expanded with a largely new composition. Dominic LeBlanc, who holds the ministerial portfolio for trade relations with the US, chairs the committee, which will hold its inaugural meeting on 27 April.
• On the same day, Canada's chief trade negotiator with the US, Janice Charette, acknowledged that the review period means Canadian exporters “could be facing some turbulence”, adding “We need to hold our nerve...It’s not clear that we are going to go back, necessarily, to the beautiful tariff-free existence we had.”

GBPUSD looks over-extended, even when considering rangebound trade this week. Negative technical patterns are building, signaling potential for a multi-week downleg. The early May elections may provide the negative sentiment catalyst to trigger a correction that could define GBP until the middle of the year. 

• Backtesting shows an all-in reversing Bollinger Band strategy has been highly profitable on a 12-month rolling basis, and the strategy flipped from a Cover-and-go-long position to Close-and-go-short on April 15th after the pair closed above the 1.3555 2.0% upper Bollinger band. The average duration of the strategy's market signal has been 35 working days (or 7 weeks), a period that would comfortably capture the early May elections, as well as any subsequent political fallout.
• Isolating the vol risk looks clear on the implied curve, with GBP vols ahead of the G10 average, but most notably the one- to three-week maturities which again capture the run up, and follow through, for the election period. This shows markets are beginning to price political risk, even if spot markets are lagging.
• This makes moving average studies even more important. GBPUSD is on the cusp of forming a death cross (50-dma < 200-dma) for the first time since November. While the study is not always a S/T bearish signal, it's important to note the longer-term average has flattened out considerably, an indication that both longer-term, and now shorter-term, momentum is waning just as we exit April, the seasonally strongest calendar month of the year for GBPUSD.
• We detail the process to trigger a Labour leadership election here: https://www.mnimarkets.com/articles/starmer-faces-pmqs-unsure-of-cabinet-support-and-welection-peril-ahead-12-1776853828864 and most notable for markets is the scenario in which a leadership crisis is triggered without a clear front-runner to replace PM, as was the case in 2022 - a particularly poor year for GBP FX rates.  
• In the event of major Labour losses on 7 May in its English electoral heartlands in London, Birmingham, and urban areas of the north, combined with a likely third-place in the Welsh Parliament and the pro-independence Scottish National Party likely to regain a majority in the Scottish Parliament, the pressure on Sir Keir will only intensify.

Latest from the New York Post:

• “Good news” about a second round of talks between the US and Iran may be coming as soon as Friday, President Trump and Pakistani sources told The Post on Wednesday.
• Sources in Islamabad touted positive mediation efforts with Tehran renewing the possibility of more peace talks within the next “36 to 72 hours.” Asked about this possible breakthrough by The Post, Trump in a text message said: “It’s possible! President DJT.”