Futures are wandering close to the flat line. The S&P has been subdued for much of the last two weeks losing momentum as it approached the highs from May 7th
. Bond yields continue to move lower, with U.S. 10s at 1.5% at the bottom of a three-month range and the lowest level since briefly trading here in early May. For all the talk about inflation, the bond market doesn’t appear too worried. Canadian government bond yields are also at their lowest level since early March. The Canadian dollar remains locked in a tight range in the low 80s with no real movement to report this morning despite oil prices moving above $70/bbl (WTI).
Ever since he entered the White House in January, Joe Biden has articulated one foreign policy goal above others — to work with allies to restrain China. Step one is to repair the fractured relationship appears a go with the two sides reportedly planning to end the tariff battle with Biden making his maiden overseas trip during a U.S.-EU summit next week
. Step two would be to coax Europe to work more closely on restraining China. The U.S. and EU intend to update the WTO rulebook focusing on improved disciplines on industrial subsidies, unfair behavior of state-owned enterprises, and other trade and market distorting practices.
Late Tuesday, the chamber approved the U.S. Innovation and Competition Act
, a $250B package aimed at challenging China's technological ambitions. The centerpiece of the legislation is $50 billion in emergency funding for the Commerce Department to boost domestic semiconductor production, in light of the global chip shortage.
Surprisingly, Canada flipped back into a trade surplus in the month of April. A trade surplus meaning our exports exceeded our imports. A surplus of $0.6 Billion was surprising as expectations were around a deficit of $0.7 billion. Difficulties in the auto sector due to chip shortages hit imports much more than it hit exports in April. Two-way trade in the auto sector hit its lowest level since 2014, ignoring the bottom of the pandemic. Diversion
: When you become a billionaire... do you throw spears
while listening to Audioslave?