Could also lead to a cut too

Fitch is out with some headlines on Canada and banks in Canada.

  • A significant tariff or trade shock could the Bank of Canada to pull is raising (or even cut) rates to help borrowers
  • Economic effect of additional tariffs would be felt throughout the economy, resulting in softening of labor and housing markets, and reducing investor confidence
  • Tariffs on steel and aluminum imposed in June(and Canada's retaliatory tariffs) have had little direct impact on overall Canadian GDP
  • Potential tariff on Canadian autos, would affect Ontario most given the large auto manufacturing sector
  • Downside economic risks from tariff–related job losses could translate into higher losses in bank consumer portfolios in Canada
  • escalation of bilateral trade tensions with US or Canada's exclusion from renegotiated NAFTA would increase risks for Canadian banks
  • trade risks would compound Canadian banks consumer exposure

The USDCAD has reversed back higher and is above the 100 hour MA again at 1.29316. The topside trend line at 1.2950 looms.