Market Chatter: Canada Could Double Its Exports to China, Minister Says in Rare Visit to Ottawa

Just days after a Canadian warship passed through the Taiwan Strait -- defying Beijing's warning that such transits undermine the bilateral relationship -- Foreign Affairs Minister Anita Anand welcomed her Chinese counterpart Wang Yi to Ottawa on Friday for the first such visit in a decade, The Canadian Press reported Friday.

Canada aims to increase exports to China by 50% cent by 2030 while safeguarding Canada's economic and national security interests and values, Anand said.

Echoing a trade target set by Prime Minister Mark Carney following his visit to Beijing earlier this year, Anand said Canada and China's leaders have set out a clear and ambitious vision for the countries' "recalibrated relationship."

"It includes elevated engagement and co-operation on trade and investment, energy, finance, public security and safety, and people-to-people ties," she said alongside Wang and his delegation at the Global Affairs Canada headquarters in Ottawa. "At the same time, each of our countries must address critical issues and priorities to ensure the safety and security of our peoples."

Wang's visit to Ottawa is the first for a Chinese foreign minister in 10 years. He is also meeting Carney on Friday. n his remarks, Wang said Canada could surpass its trade goal and even double exports to China if the relationship is maintained. He said China will soon become the largest market in the world and that it's open to Canada.

The prime minister visited China in January and met with President Xi Jinping, the report noted.

(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Trump Administration Wants To Raise North American Auto Content to 82%, With Half From U.S.

The Trump administration wants to increase the level of regional content in North American-built vehicles to 82% to qualify for preferential treatment under the U.S.-Mexico-Canada Agreement on trade, with 50% of that value produced in the United States, four people familiar with the U.S. negotiating position said, Reuters is reporting Friday.The expansive demand, unveiled during this week's U.S.-Mexico negotiations over revisions to the six-year-old USMCA in Mexico City, has no provision for counting any parts content from Canada in the totals, the report noted. Canada is not represented in the Mexico City talks, the sources said.The shift, if accepted, would be a major break from the current USMCA, which requires that 40% of the "core parts" value of North American passenger vehicles be produced in high-wage jurisdictions, effectively the U.S. or Canada, Reuters said.That threshold is now 45% for pickup trucks. Overall, vehicles built in North America currently must have 75% regional content to qualify for preferential treatment under USMCA.The U.S. demand and lack of accommodation for Canada are consistent with Trump administration officials' frequent questioning of why Canada should export vehicles and auto parts to the U.S. and voicing a desire to move that production to the U.S, the report noted.Auto industry officials said there was a high likelihood that U.S. Trade Representative Jamieson Greer would seek to negotiate the new rules of origin with Mexico and then present them to Canada as a take-it-or-leave-it proposition. Greer has been evasive about whether USMCA would continue as a trilateral trade pact or be broken into separate bilateral agreements.(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

RBC On Key Things To Watch Next Week and Its Rates View

RBC Capital Markets said next week's key Canadian economic release will be the May Labour Force Survey on Friday, with its economists expecting employment growth and a modest decline in the unemployment rate.In its CAD Weekly Soundbites report, RBC said it expects a 25,000 increase in employment in May and a decline in the unemployment rate to 6.8% from 6.9% in April. "Near-term, the labour outlook is unlikely to worsen further, given trade-concentrated layoffs have likely bottomed out and recent weakness largely reflected longer job searches for new entrants," RBC added.Remaining economic slack, along with inflation around target, reinforces RBC's view for the Bank of Canada to stay on hold with rates for the rest of 2026.RBC noted other key things to watch for next week include first-quarter productivity on Wednesday and S&P PMIs, with manufacturing due Monday and services and composite readings due Wednesday. Senior Deputy Governor Carolyn Rogers is also scheduled to appear before the House Public Accounts committee on Monday, although RBC said no fireworks are expected given the proximity to the June Bank of Canada meeting.On monetary policy, RBC said the recent GDP print "further extends runway to hikes." The bank noted that the Bank of Canada flagged risk scenarios to both cuts and hikes at its April meeting, though its overarching message was one of comfort with where policy was positioned."Slight but meaningful slack in labour markets and the economy, combined with underlying inflation around the 2% target, provides little impetus for the BoC to move off the bottom-end of its 2.25-3.25% neutral range," RBC added.RBC said despite volatility during the week around Iran deal optimism and weak Canadian GDP data, Canada-U.S. bond spreads were little changed from the previous week, with the five-year spread at negative 108 basis points.On foreign exchange, RBC said that if the U.S. and Iran were to reach a deal, USD/CAD may have further room to sell off on a weaker U.S. dollar initially. However, it added that the U.S. dollar's status as a higher-yielder in the G10 and relatively wide U.S.-Canada rate differentials act as a floor under USD/CAD.George Davis of RBC Capital Markets said a "spinning top pattern" halted the move higher in Canadian 10-year yields near 3.70%, while the subsequent bullish trend reversal below 3.51% resulted in a false break to the topside. "A daily close below resistance at 3.43% would amplify the false break and shift the focus down to 3.39% and 3.36% initially, followed by 3.27%," Davis said. "Support is now located at 3.53% and 3.61%."

$$CXY$CAD$usd

Market Chatter: Canada Could Double Its Exports to China, Minister Says in Rare Visit to Ottawa

Related Articles

Market Chatter: Trump Administration Wants To Raise North American Auto Content to 82%, With Half From U.S.

RBC On Key Things To Watch Next Week and Its Rates View

US Treasury Closing Levels