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Is Canada the Biggest Trade Winner?

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What’s in Today’s Report:

  • Is Canada the Clear Winner from the New NAFTA?

S&P futures are decidedly lower while most international markets were down overnight thanks to Italian political/budget fears.

The 2.4% budget deficit Italy proposed to the EU was not well received yesterday and the mention of “Italy’s own currency” by a notable law maker overnight sent Italian bond yields to more than four year highs.

Meanwhile safe haven money flows are pushing Treasury and Bund yields lower and the dollar is up to fresh multi-week highs which will quickly become a headwind on US shares again in the near term.

Today, there are no notable US economic reports but there are two Fed speakers to watch: Quarles (10:00 a.m. ET), and more importantly Chair Powell (12:00 p.m. ET). Otherwise, focus will be on Europe and any developments with Italy’s budget or further discussions of Italy’s “own currency.”

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New Highs

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What’s in Today’s Report:

  • Why Stocks Hit New Highs
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet

Futures are extending Friday’s gains following efforts by Chinese authorities to further strengthen the yuan.

The yuan strengthened to a one month high vs. the dollar as Chinese officials re-introduced the “Counter Cyclical Factor” in setting the daily value of the yuan.  That “factor” is widely seen as an intent to ensure yuan strength and avoid a potential breach of 7.00.  And, that support of the yuan is a potential macro positive.

The only notable econ report was German IFO Business sentiment, which beat estimates at 106.4 vs. (E) 105.4.

Today there are no notable economic reports and no important Fed speakers, so focus will remain on any trade headlines (a new trade deal with NAFTA seems imminent and that should be a mild positive on sentiment and stocks).

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