Trade Dependency: Why Mexico and Canada Need the U.S. Market More

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3950-1.4160

Euro                 1.4650-1.4880

Sterling            1.7700-1.7930

WTI Oil (opening level) $69.98

The CAD is opening at 1.4063 ( 0.7111)

Heard an interesting statistic. With Trump pushing the idea of tariffs against Mexico and Canada of 25% unless they fix the borders with the USA. In regards to trade with the USA, access to the USA market is more important to the Mexico and Canada than it is to the Americans. We need them, more than they need us.

Here are the numbers

Export trade numbers from Mexico to the USA make up 1/3 of their economy, while exports from the USA to Mexico make up 1.3% of the GDP

In Canada, export trade to the USA make up around 1/5 of the economy, while the USA exports make up about 1.4%.

That is a lot of jobs focused on servicing the USA.

The USA doesn't need the other countries as much as they need the USA.

No wonder that the Canadian government is running to meet with Trump in Florida now 

Key points

·    Equities: US tech gains push markets to record highs, CAC40 and DAX rise, Asia subdued

·    Volatility: VIX trends lower, focus on Powell’s speech and labor market data

·    Currencies: AUD weaker after soft Q3 GDP brings forward rate cut prospects

·    Commodities: Crude jumps on Iran sanction and OPEC+ production curb speculation

·    Fixed Income: France no-confidence vote in focus