Canada PM Carney Says Ottawa, Washington in Intensive Talks on New Economic, Security Deal

Political

Economic

Summary:

Carney said it's his goal for the U.S. and Canada to agree on a new bilateral pact in the coming months that removes the hefty tariffs. "I don't think it's in either of our nation's interests for it to drag out," Carney said.

Canadian Prime Minister Mark Carney said officials in Ottawa and Washington are engaged in intensive negotiations on a new bilateral economic-and-security deal, and it's neither in President Trump's or his interest to let talks drag on through the fall.

"We've got more that we need to do before we're satisfied that we have a partnership that is in Canada's interest," Carney said in a broadcast interview Tuesday with the Canadian Broadcasting Corp. "We've made a lot of progress."

Carney's Liberal government delivered its ceremonial Speech from the Throne, which marks the opening of Parliament after last month's election. The speech, read by King Charles III, focused on Canada's sovereignty and the need for an ambitious economic agenda as the country must deal with a protectionist U.S. Trump has imposed hefty 25% tariffs on Canadian steel, aluminum, assembled vehicles and goods that are not compliant with the existing U.S.-Mexico-Canada trade pact. Canada has responded with 25% retaliatory tariffs on about $43 billion of U.S. imports, but has since provided exemptions to the automotive and manufacturing sectors to give them time to find new non-U.S. suppliers.

Last week, Bank of Canada Gov. Tiff Macklem warned the economy might deteriorate further unless there's a quick end to the current U.S.-Canada conflict.

Carney is a novice politician but a former central banker in two Group of Seven economies, Canada and Britain. Carney won last month's election on a pitch that he has the acumen and experience to navigate Canada through this present crisis, fueled by Trump's tariffs and threats to annex Canada as the 51st state.

In the interview, Carney reitirated that the decades of close integration between the two countries is over. "We are seeing the danger of overreliance on the United States," he said. "So we will cooperate where necessary, where it is in both of our interests very clearly, but we won't necessarily cooperate." The speech to parliament highlighted the need to build deeper economic and defense ties with Europe and Asia.

Last week, Carney told journalists that Canadian officials are looking at possible participation in Trump's proposed Golden Dome shield, which would combine ground-based interceptors with satellites to guard U.S. territory against high-tech threats. After the CBC interview aired, Trump said on his Truth Social account that Canada would need to provide $61 billion to be part of the shield, "but will cost ZERO DOLLARS if they become our cherished 51st State. They are considering the offer!" A spokeswoman for Carney did not respond to a request for comment.

Trump has argued the U.S. doesn't need energy, lumber and cars produced in Canada, and prefers that those products from America's northern neighbor be made domestically. Carney said Canada is an ideal partner for the U.S. to create a competitive, North American auto sector that faces a stiff challenge from China and other parts of Asia.

"Can the U.S. auto sector be viable if it's just an American auto sector? The answer is no," Carney said, citing the assembly plants and parts manufacturers that help feed U.S. demand. "That integration of the auto sector is part of what will make North America competitive, and that's what we're working towards."

Source: Dow Jones Newswires

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Manuel

Cryptocurrency

VanEck head of digital assets research Matthew Sigel called on US lawmakers to attach a royalty to domestic Bitcoin (BTC) mining so the federal government can accumulate BTC for its strategic reserve.

Speaking during a policy panel at the 2025 Bitcoin Conference in Las Vegas on May 27, Sigel said the reserve can grow through two main channels in his perspective.

He explained that one option is executive action, which points to the Exchange Stabilization Fund as a vehicle for an initial $100 million allocation. However, Sigel warned that any larger purchase “is gonna get sued by the Elizabeth Warrens of the world.”

Meanwhile, the second and more durable path would involve inserting funding language into Congress’s annual budget-reconciliation process, which requires only 51 votes in the Senate.

Beyond direct allocations, Sigel told the audience that Congress should “put small amendments in every bill” requiring miners to transfer a slice of block rewards to the Treasury.

His remarks come amid heightened discussions about creating a tax-neutral way to fund a BTC reserve after President Donald Trump’s March 6 executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile.

The order directs Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to expand federal holdings without new taxpayer spending.

Mining-royalty system

According to Sigel, mining royalties would satisfy the mandate because miners, not taxpayers, would supply the coins.

He framed the idea as a way to “clean up the environment and accumulate a Bitcoin stack at the same time,” arguing that miners who convert waste methane into electricity deserve tax relief while Washington receives a royalty.

Under this outline, energy producers that flare or vent methane could install mobile data-center rigs, route the gas into generators, and earn block rewards free of income tax. Miners would forward an agreed-upon percentage, Sigel suggested single digits, directly to the Treasury’s reserve wallet.

According to Sigel, the model reduces greenhouse gas emissions and diversifies national reserves without federal outlays. He further argued that pilot programs could refine royalty rates and compliance rules.

Legislative road map

Sigel called for bipartisan co-sponsors to embed royalty language in energy, defense, and appropriations bills.

He cited federal oil-and-gas royalties as precedent for attaching revenue riders to extraction activities.

He also urged state officials who regulate flaring to accelerate permits for miners that sign federal royalty contracts, mirroring existing tax holidays for data centers and renewable-power projects.

Sigel closed by saying swift legislative work could let the US “stack sats” within current fiscal limits and position the reserve for the next budget cycle.

Source: Cryptoslate

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Economic

Bond

Browbeaten long-bond investors got some relief on Tuesday as a global debt rally sent benchmark yields tumbling.

Investors were lured to long-maturity bonds for the first time in weeks, offsetting — if only for a day — a selloff sparked by a deteriorating fiscal outlook and simmering tariff tensions. Thirty-year Treasury yields posted the biggest one-day slide since late March, following news on Tuesday that Japanese authorities may adjust debt sales following a market rout. Solid demand for a $69 billion sale of two-year Treasuries added to the advance in the US.

The day of gains comes even as President Donald Trump’s slew of tariff announcements and the passing of his signature tax bill in the House of Representatives slices into sentiment. Long-bond investors have fled the asset class in recent weeks as its so-called safe-haven status is called into question.

“There is a little bit more optimism. It’s certainly a calmer market,” Tony Rodriguez, Nuveen’s head of fixed income strategy, said on Bloomberg TV. Still, “We’re settling into a range that feels very tenuous because there’s so much uncertainty.”

Earlier, Japanese authorities signaled they were considering adjusting their debt plan after a selloff that drove the nation’s long-term borrowing costs to the highest levels in decades. Concern about the ability of governments to cover massive budget deficits weighed on developed-market debt in recent days, pushing long-dated US yields toward levels last seen in 2007.

“That potential lower issuance is giving Treasuries a nice helping hand,” said Michael Brown, strategist at Pepperstone Group in London. “For those seeking to buy long-term debt, lower Japanese government bond supply could force them into the Treasury complex.”

Japan’s finance ministry sent a questionnaire to market participants on Monday evening asking for their views on issuance and the current market situation, Bloomberg reported. It was an unusual move and traders took it as a sign that authorities are seeking to stabilize the rout in long-dated bonds.

Some other governments have already shifted issuance toward shorter-dated tenors. The UK has been steering away from longer bonds given falling investor demand, a strategy that was reinforced by Jessica Pulay, head of the debt management office, in an interview published with the Financial Times on Tuesday.

The yield on 30-year UK gilts fell as much as nine basis points on Tuesday as local markets were also shut on Monday, but the moves pared throughout the session. Similar-dated German rates dropped seven basis points to below 3%.

Temporary relief

The chance that Japan’s government will reduce its bond supply goes at least some way to addressing the worries over demand. But it doesn’t address wider concerns about government finances globally, raising the possibility that Tuesday’s bond rally is only a brief pause in the tumult.

Japan’s bond market has also been squeezed by signs that the central bank may attempt to taper its huge holdings of government bonds further.

“Long-end yields are experiencing some relief, but we think US yields will find it particularly difficult to shake off a bearish taint over the coming weeks and months,” said Benjamin Schroeder, senior rates strategist at ING. “The fiscal trajectory still matters.”

US Treasuries have been in the spotlight since Moody’s Ratings stripped the government of its last top credit rating based on fiscal trends. The rout was compounded by the US House of Representatives last week passing Trump’s signature tax bill, which will increase the federal debt limit by $4 trillion.

A measure of how jittery investors are about Washington’s plans to raise the scale of future borrowing, the 10-year US term premium, is trading near the highest level since 2014.

US bond investors are now looking ahead to auctions of five- and seven-year debt later this week, as well as the release of the Federal Reserve meeting minutes, economic growth and inflation data.

The decline in yields pushing the US 30-year yield back below 5% is “psychologically important,” said Kathleen Brooks, research director at XTB. “Risk sentiment is given a boost.”

--With assistance from James Hirai, Edward Bolingbroke, Sydney Maki, Carter Johnson and Ye Xie.

Source: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Manuel

China–U.S. Trade War

Stocks

An intensifying auto industry price war in China has stoked fears of a long-anticipated shake-out in the world’s largest car market.

Shares of China’s largest automakers sank Monday after Chinese electric-vehicle giant BYD offered fresh discounts across more than a dozen models, and an executive at another car company fretted openly about the country’s deepening price war. BYD’s moves cut the starting price of its cheapest model, the battery-powered Seagull hatchback, to 55,800 yuan ($7,765), from nearly $10,000.

The BYD price cuts, along with other developments, signal a potential tipping point, where weaker players can no longer sustain deepening losses from the downward spiral on prices, said Tu Le, managing director of Sino Auto Insights, an advisory firm.

“This points to a bloodbath later this year,” he said. “This could be the first domino that would finally put pressure on weaker players -- startups like Neta and Polestar -- that have been teetering.”

On Friday, the chairman of Great Wall Motors, Wei Jianjun, warned that China’s auto sector was in an unhealthy state, with pricing pressure hammering the bottom lines of car companies and suppliers. He even drew a parallel to Evergrande, the Chinese property developer that was liquidated last year after a major debt crisis.

"Now, Evergrande in the automobile industry already exists, but it has not collapsed," he told Sina Finance in an interview.

In another sign of stress in the market, Reuters reported that Chinese commerce regulators are examining a growing phenomenon that has also strained the industry: sales of “used cars” that are essentially new cars with zero miles. The tactic is seen as a way for automakers and dealers to hit aggressive sales targets, a person familiar with the matter told Reuters.

The Hong Kong-listed shares of BYD Co Ltd closed 8.6% lower on Monday, while Geely Auto <0175.HK> fell 9.5%. Others, such as Nio (9866.HK) and Leapmotor (9863.HK), closed between 3% and 8.5% lower.

A slew of startup companies have piled into China’s car market over the past decade, drawn by the burgeoning electric-vehicle sector. The market has grown crowded with cut-throat price competition and most companies sustaining heavy losses.

Of the 169 automakers operating in China today, more than half have less than 0.1% market share, according to data from research firm Jato Dynamics. The crowded field is reminiscent of the U.S. auto sector in the early 20th century, when more than 100 companies vied with big players such as Ford, before the industry consolidated.

Le said the price war has lasted roughly three years. Car makers once enjoyed a premium for advanced features such as driver-assistance systems that take control of steering and braking in certain situations, but now more have been offering these as part of the sticker price.

Last week, China's state planner cautioned that competition in some industries was getting too heated, with some companies even selling their cars below cost, disrupting fair competition.

On Friday, Wei, the Great Wall <601633.SS> chairman, warned the prolonged price war was harming the automotive supply chain. Some suppliers are at risk of going under because of pressure from car companies to lower their prices, he said.

"Some products have been reduced from 220,000 yuan to 120,000 yuan in the past few years,” he said, without naming companies. “What kind of industrial products can be reduced by 100,000 yuan and still have quality assurance?”

Still, predictions of consolidation in China’s car market have gone on for years, but the field has only grown, said Michael Dunne, a consultant who closely follows the China auto industry.

“BYD's price cuts will drive out some of the weaker players,” he said. “But for every casualty here comes a new Xiaomi or Huawei barreling into the arena."

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Bond

Forex

The dollar strengthened on Tuesday as the yen came under pressure from a sharp fall in Japan's long-dated bond yields, while the greenback was boosted by data improving U.S. consumer confidence.

"It's very much being driven by global bond markets, and most recently what we've seen in Japan," said Eric Theoret, FX strategist at Scotiabank in Toronto. "Market participants are reading into the fact that the Ministry of Finance sent out a questionnaire to their primary dealers about issuance."

Bloomberg reported on Tuesday that the Japanese Ministry of Finance sent a questionnaire to market participants regarding issuance and current market issues. Japan will consider trimming issuance of super-long bonds in the wake of recent sharp rises in yields for the notes, two sources told Reuters on Tuesday.

The plan comes amid a recent spike in super-long bond yields to record levels due to dwindling demand from traditional buyers such as life insurers and global market jitters over steadily rising debt levels.

The dollar was last up 1% at 144.28 Japanese yen . The euro fell 0.46% to $1.1335.

The greenback added to gains after data showed U.S. consumer confidence in May was much better than economists had expected.

Data this week will include personal consumption expenditures for April, the Federal Reserve's preferred inflation measure, on Friday.

Minneapolis Fed President Neel Kashkari on Tuesday called for keeping interest rates steady until there is more clarity on how higher tariffs affect inflation, warning against "looking through" the impact of such supply price shocks.

The euro, meanwhile, was dented by data showing that French inflation fell to its lowest level since December 2020 in May.

U.S. President Donald Trump on Sunday dropped his threat to impose 50% tariffs on European Union imports from next month, which boosted risk appetite on Tuesday.

European Union policymakers have asked the EU's leading companies and CEOs to swiftly provide detail of their U.S. investment plans, according to two sources familiar with the matter, as Brussels prepares for trade talks with Washington.

Investors are concerned that tariffs will hurt growth and potentially reignite inflation, though traders have become less pessimistic on the U.S. economic outlook since the United States and China earlier this month reached a deal to slash tariffs they had imposed on each other.

Longer-term, the more protectionist stance of the United States is expected to continue to hurt the greenback.

"We're still in an environment of medium to longer term U.S. dollar weakness," said Theoret.

European Central Bank President Christine Lagarde said on Monday that the euro could become a viable alternative to the dollar if governments could only strengthen the bloc's financial and security architecture.

Investors are also watching the passage of a spending and tax bill through the U.S. Congress that is expected to add trillions of dollars of debt.

"Our first take on the House budget is it's not too bad, but could be better. It will reduce the deficit-to-GDP ratio, though probably not enough to put the budget on a sustainable path," Chris Low, chief economist at FHN Financial said in a note.

Low noted, however, that "no one is happy" with the bill, with right-wing commentators upset that it didn't further DOGE spending cuts, while left wing pundits are mainly opposed to the size of cuts to social spending.

U.S. Senate Republicans said on Thursday they will seek substantial changes to the spending bill after it narrowly won approval in the House of Representatives.

Elsewhere the dollar strengthened 0.77% to 0.827 Swiss franc.

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Bond

Forex

Dip buyers in the dangerous world of long-dated Treasury debt are enjoying a rare pay day — and fast.

Investors over the past week poured $1.8 billion into BlackRock Inc.’s iShares 20+ Year Treasury Bond ETF (ticker TLT) — the most among all the 630 ETFs that Bloomberg tracks — just as longer-maturity government bonds sold off on fears over America’s debt trajectory.

The timing has proved fortuitous. In Tuesday trading, Treasuries rallied — pushing the 30-year yield below 5% — on optimism about trade negotiations between the US and the European Union, and as Japan signaled it may adjust debt sales to stabilize its bond market. TLT jumped 1.7% during the session, on track for its biggest daily rise since February.

It’s a rare win for an ETF trade that has earned a reputation as a so-called widow maker. True to its infamy, TLT has attracted some $49 billion in the past five years despite shedding more than 40% in that time horizon.

“Investors aren’t letting TLT’s widow-maker reputation scare them off,” said Athanasios Psarofagis, ETF analyst at Bloomberg Intelligence. “They’re still buying in, holding on to hope that long-term Treasuries will finally bounce back.”

For some time, bond investors have been demanding extra compensation for the risk of investing in longer-duration debt as Republican lawmakers haggled over President Donald Trump’s signature tax-cut bill that would add trillions of dollars to already bulging budget gaps. Benchmark 30-year Treasury bonds surged above 5.1% last week to trade near the highest in almost two decades.

But last week’s buying streak in TLT suggests that a growing cohort of traders are betting that yields are high enough to entice buyers and compensate for the risks. Long-maturity bonds are most exposed to interest-rate risk, so they tend to rally the most when borrowing costs fall.

“Dip-buyers are trying to pick the bottom,” and long-term bonds give investors “the biggest bang for your buck” because they are exposed to the most volatile part of the yield curve, said Byron Anderson, head of fixed income at Laffer Tengler Investments Inc. "Widow Maker" Bond-ETF Trade Delivers Fast Gains for Dip-Buyers_1

"Widow Maker" Bond-ETF Trade Delivers Fast Gains for Dip-Buyers_1

The iShares 10-20 Year Treasury Bond ETF (TLH) was also among the ETFs that attracted the most inflows over the past week, along with the iShares 0-3 Month Treasury Bond ETF (SGOV).

Peter Tchir of Academy Securities is among those recommending long-bonds, saying the pessimism is overdone. Adding heft to his belief is the rally in global bonds after Japanese authorities signaled they are considering adjusting their debt plan.

“The situation wasn’t as bad as the narrative,” said Tchir who recommended investors add duration last week. “Positioning had swung from too bullish to too bearish fairly quickly, too.”

Of course, TLT — which is almost as volatile as US stocks — isn’t for faint hearts. In the options market, traders remain wary of further declines in long bonds. It costs more to buy put options in TLT than to purchase calls, a sign there is demand for downside protection.

“We believe the long end will continue to see term premium increase,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management. “It’s all about the fiscal, what is the right level to lend at to countries whose balance sheets are trending the way they are.”

Source: Bloomberg

Risk Warnings and Disclaimers

Add to Favorites

Manuel

Commodity

Middle East Situation

Oil prices fell more than 1% on Tuesday, spurred by worries of a supply glut after Iranian and U.S. delegations made progress in their talks and on expectations that OPEC+ will decide to increase output at a meeting this week.

Brent crude futures were down 90 cents, or 1.4%, at $63.86 a barrel by 1:25 p.m. ET (1725 GMT). U.S. West Texas Intermediate crude fell 90 cents, or around 1.5%, to $60.63 a barrel.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, is not expected to change policy at a meeting on Wednesday.

However, another meeting on Saturday is likely to agree to a further accelerated oil output hike for July, three delegates from the group told Reuters.

Meanwhile, Iranian and U.S. delegations wrapped up a fifth round of talks in Rome last week. While signs of limited progress emerged, there were many points of disagreement that were hard to breach, notably the issue of Iran's uranium enrichment.

"OPEC+ also meets next week where they will likely agree on further output increases, which, if it occurs, will be a major near-term headwind for crude, especially if Iran adds barrels in the possible (U.S.) deal," said Dennis Kissler, senior vice president of trading at BOK Financial.

If nuclear talks between the U.S. and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian oil supply, while any resolution could add Iranian supply to the market.

Supporting prices, U.S. President Donald Trump's decision to extend trade talks with the European Union until July 9 alleviated immediate fears of tariffs that could suppress fuel demand. Wall Street rose on Trump's trade reprieve.

Easing trade concerns were supportive, said UBS analyst Giovanni Staunovo, adding that upside to prices remains limited until it is clear what OPEC+ will decide on Saturday.

Also helping prices, a wildfire in the Canadian province of Alberta prompted the temporary shutdown of some oil and gas production.