Mackenzie Investments’ chief strategist for fixed income, Dustin Reid, has been sharing his views with WP on how talks between the two neighbours may impact investors.
“The most significant takeaways were the constructive nature of the meeting, and the impression that not only further discussion would take place, but that it would likely also be constructive. Investors were concerned the first meeting would not be overly productive or constructive,” he says.
Reid notes that the meeting has not moved the dial on interest rates for either the Fed or the BoC, and the two central banks will likely forge their own fiscal paths. But the renegotiation of the USMCA will be the big economic alignment – or not!
On cross-border capital flows and foreign investment between the two countries, Reid says there is a “general view in the market at the moment that US dollars will likely need to be further hedged in the context of global portfolios, but the meeting itself likely did not contribute to speeding up or slowing down those flows.”
While there was some short-term lift for market sentiment following the meeting, it was just one meeting and Reid expects future talks to shape medium and long term sentiment.
