NAFTA

The US and Canada came to a new agreement over their trilateral trade deal with Mexico, now called USMCA, and replacing the old NAFTA, making the Canadian dollar the overall winner across the FX board. There were also some headers indicating that the UK would reconsider its plan about the Irish border to get a Brexit deal. Both headlines fuelled risk appetite but didn’t benefit the EUR or the Pound which rose just briefly. In fact, the EUR is down for the day after a softer-than-expected EU Markit Manufacturing PMI undermined demand for the common currency. The final version of the index came in at 53.2 for September, the slowest rate of growth for the sector for two years. Also, German Retail Sales disappointed, down in August by 0.1% vs. a 0.4% advance expected. The USD strengthened, despite manufacturing activity expanded at a slower-than-expected pace with the ISM Manufacturing index resulting at 59.8, down from 61.3 in August.

This Tuesday, the macroeconomic calendar will be lighter, with the only relevant event scheduled being a Fed’s Powell speech, due to speak about the outlook for employment and inflation at the National Association for Business Economics Annual Meeting, in Boston.