Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

0445 ET - The Canadian dollar's limited reaction to President Trump imposing new tariffs on Canada appears justified for now, Commerzbank's Volkmar Baur says in a note. "Given the multitude of threats Trump has made in recent months--not all of which have been carried out--the muted reaction seems reasonable for now." However, trade tensions will dominate news surrounding the Canadian dollar in coming weeks and the 50% tariff on a wide range of goods is likely to weigh on Canadian exports, he says. The U.S. dollar trades flat at 1.4065 Canadian dollars, having reached a one-week high of 1.4085 overnight, according to LSEG. The Canadian dollar's modest falls earlier could also reflect lower-than-expected June inflation data, he says. (renae.dyer@wsj.com)

0144 ET - U.S. Treasury yields edge lower in line as oil prices decline slightly even as the Middle East conflict does not abate. Following the collapse of the U.S.-Iran Memorandum of Understanding for peace, "the conflict now largely revolves around control of the Strait of Hormuz," SEB's Maya Westerlund says in a note. However, the risk is a more prolonged stalemate, with continued uncertain energy flows, higher oil prices and recurring attacks, she says. The two-year Treasury yield falls 1.3 bps to 4.200%, while the 10-year yield declines 0.6 bps to 4.591%, according to Tradeweb. (emese.bartha@wsj.com)

2205 ET - The Trump administration's announcement of an additional 50% duty on Canada, following the announcement of a levy on Brazil, could be a way to rebuild its tariff regime. Capital Economics' Stephen Brown notes the administration is resorting to a new method that cites Section 338 of the 1930 Tariff Act. That may be an attempt to see if Section 338--which some commentators suggest was superseded by subsequent legislation--could be used to impose duties on other countries in the future, the economist says. If so, that could help the administration regain some of the flexibility it lost when the Supreme Court struck down prior tariffs, though Brown notes considerable uncertainty about whether it will follow through with new duties and if those will be upheld by the courts. (fabiana.negrinochoa@wsj.com)

1813 ET - The Canadian dollar weakened after President Trump's plan to impose a 50% tariff on a broad range of goods. The escalation in trade tension "threatens to damage the Canadian economy and add to the strain of an already vulnerable currency," says Karl Schamotta, chief market strategist at forex firm Corpay. The 50% duty, he says, will apply regardless of whether they were previously exempted under USMCA's terms--removing a key protection for Canadian exporters. There are carve outs, such as energy, which Schamotta says should limit the macroeconomic blow. Along with the tariffs, the White House unveiled a series of measures aimed at building up aluminum-smelting capacity in the US, which Schamotta warns could hit Canada hard. Canada is America's top foreign supplier of the metal. (Paul.Vieira@wsj.com, @paulvieira)

1805 ET - President Trump's threat to impose a 50% tariff on a wide range of Canadian goods could prompt the Bank of Canada to reconsider the need for rate cuts. Back in April, Gov. Tiff Macklem warned the central bank might need to cut rates should Washington escalate trade restrictions. In its latest economic outlook, published last week, the BOC projects a rebound in growth -- and one of the assumptions underpinning that forecast is that the average US tariff rate on Canadian goods remains at the 5% level. Trump's new trade gambit comes as BOC officials were of the view that firms are finally adjusting to the trade landscape. USDCAD is up marginally in trading after the White House released the new Canada tariff plan. (Paul.Vieira@wsj.com, @paulvieira)

1115 ET - The European Union's trade deal agreed a year ago with the U.S. has failed to achieve its goal of stable transatlantic economic relations, the DIHK German Chambers of Industry and Commerce's Volker Treier says. The deal, which places a tariff cap of 15% on most EU goods imports to the U.S., hasn't stopped companies facing new tariff threats, additional bureaucratic hurdles, and legal uncertainty, Treier says. "As long as conditions can change at any time, investments will fall short of their potential and long-term business decisions will be postponed." To diversify the EU's trade, agreements with Indonesia and Australia should be ratified swiftly, he says. Talks with Malaysia, Thailand, and the Philippines must be at the top of the agenda, he adds. (edward.frankl@wsj.com)

0851 ET - The Canadian dollar is holding steady relative to the US dollar despite President Trump's latest threat to impose a new set of tariffs on Canada due to smoke in US cities from Canadian forest fires. Karl Schamotta, chief market strategist at forex firm Corpay, says traders view the threat, which would add pollution-related levies on top of existing duties, "as more smoke than fire, and are not adding to the risk discount embedded in the currency," since the trade war between the two countries escalated last year. (Paul.Vieira@wsj.com; @paulvieira)

0549 ET - Global trade growth could slow if artificial intelligence-related demand weakens, HSBC economists write in a note. Trade remains closely linked to the AI cycle, with related goods driving 80% of global export growth in nominal terms, they write. These goods account for around 80% of Taiwan's total exports and 27% of U.S. imports. Exports excluding tech show a softer picture, they note, with export growth of other goods having largely flat-lined since 2024. AI is also helping support services trade, they note. Still, based on capital expenditure forecasts of the top hyperscalers, the AI boom likely still has further to run even if the pace of growth moderates next year, they say. (kimberley.kao@wsj.com)

(END) Dow Jones Newswires

July 21, 2026 04:45 ET (08:45 GMT)

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