Canada’s AAA Rating Is on Thin Ice - Bloomberg

According to the latest wires, via Reuters, Canada's country rating might be on the spotlight as credit agency Fitch reviews 'how' things would look like if protectionist measures proposed by President Trump become a new reality. 

Key Highlights:

•“U.S. policy predictability has diminished, with established international communication channels and relationship norms being set aside and raising the prospect of sudden, unanticipated changes in U.S. policies with potentially global implications.” (Fitch)

•“Countries hosting U.S. direct invest“U.S. positions on some countries may change quickly, at least initially, but any potential rating adjustments will depend on consequent changes to sovereign credit fundamentals, which will almost certainly be slower to materialize.”ment, at least part of which has financed export industries focused back on the U.S., are at risk of being singled out for punitive trade measures,” the credit rater wrote. “Countries with the highest stock of U.S. investment in manufacturing are Canada, the U.K., Netherlands, Mexico, Germany, China, and Brazil.” (Stephen Schwarzman, chairman of Blackstone Group LP)

•“If trade protectionist measures are produced that hit Canada, that’ll affect government revenue negatively and a credit rating downgrade would increase the risk premium investors demand for holding government bonds.” (Randall Bartlett, chief economist at the Institute of Fiscal Studies and Democracy in Ottawa)

•“U.S. positions on some countries may change quickly, at least initially, but any potential rating adjustments will depend on consequent changes to sovereign credit fundamentals, which will almost certainly be slower to materialize.” (Fitch)

Meanwhile, the USD/CAD pair slowly fades below 1.3100 as market participants rebalance risk positions to evaluate the next political event to take place today at 2:00 p.m. EST when President Trump and Canada's PM Trudeau convey in press conference.