China Action On Commodities And Crypto Featured

Canadian markets are closed today for Victoria Day, but it is a quiet week in any event for Canada's economic diary. Separately, note that the US issued a preliminary ruling that would double the tariff on Canadian softwood to above 18%. A final determination is expected in H2. The tariff was originally set at over 20% (January 2018) and was cut to just below 9% last November. However, in 2019, the WTO ruled that the way the US calculated the tariff was improper.

Mexico reports its bi-weekly CPI figures today, and although the pace may have eased a bit, it will remain well above the 2%-4% range. Tomorrow, the April trade figures will be released. In March, Mexico was surprised with a large ($3 bln) deficit. In addition, minutes from the recent Banxico meeting will be released tomorrow, and the tone is expected to be less dovish. Meanwhile, some reports estimate that violence during the campaigns for the legislative election on June 6 is around 2/3 above what was experienced during the 2018 presidential race. 

 The US dollar is trading in a 15-pip range on either side of CAD1.2070, within the pre-weekend range (~CAD1.2030-CAD1.2100). On a weekly basis, the greenback has not risen against the Canadian dollar since the week ending April 2. Neither the Slow Stochastic nor the MACD confirmed last week's new four-year low (~CAD1.2015). However, the upside stalled in the middle of last week around CAD1.2145. Last week was only the second weekly increase in the US dollar against the Mexican peso here in Q2. It is bumping against the 20-day moving average (~MXN20.00), which it has not closed above in nearly two weeks. The technical indicators suggest the upside may be challenged. A convincing break of the MXN20.00 area could target the MXN20.20 area. 


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Read more by Marc on his site Marc to Market.

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