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### POV: CONSTRUCTIVE NAFTA TALK......>

DOLLAR-CANADA
DOLLAR-CANADA: ### POV: CONSTRUCTIVE NAFTA TALK COULD TRIGGER FURTHER CAD
STRENGTH
- Bloomberg reports that President Trump is pushing to announce a preliminary
NAFTA as soon as next week could see USDCAD move through 1.28 and challenge
1.2688 (50% of the 2018 range).
- Seasonal charts suggest April is a good month for CAD against the USD, rising
7 out of the last 9 years. Further strengthening the case, CAD has also improved
against the USD in Q2 for the last 4 years.
- Investment banks have recommended buying CAD on the crosses, particularly
against the EUR.
- USDCAD risk reversals in the 1m and 1w have reversed last July's highest
levels and are not currently pricing in a NAFTA collapse any time soon.
- The main event risk of the week is Friday's Canadian jobs report. The jobless
rate is expected to hold steady at multi-decade lows of 5.8% with focus on the
composition of jobs. Although job growth should be led by part time workers,
markets will also look to wages after the recent uptick in CPI.

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