Funda-FX wrap: geopolitical matters lacking signs of traction

• Funda-FX today was full of geopolitical headlines.
• Taking the top spot was NAFTA.

However, the key issue with NAFTA is timing. Unless a deal can be agreed upon this month, there is going to be very little time before the Mexican elections in July or time for anything to be passed by Congress before 2019.  So there are plenty of hurdles along the way through Congress under the 'trade promotion rules' before anything can be signed off and agreed, hence why House Speaker Paul Ryan calculated that lawmakers would need to see a deal by TODAY in order to be able to vote on it this year.

• No BAFTA's for NAFTA play writers today, and here's why

At the time of writing, USD/MXN is consolidating the bullish correction from 19.49 (10-D SMA support) at 19.7244 - targeting the double top highs of 1.1990's while USD/CAD has been capped by the convergence of the 21 and 50-D SMAs at 1.2826/25 - fundamentally, the downside is favoured in the Mexican peso and Loonie at this stage. 

• Wall Street stocks in the red as Trump loses hopes on China trade talks.
• WTI capped in bullish territory, RSI confirm further upside.

Meanwhile, here are the major headlines from the day, (source LiveSquawk):

• EU brushes off UK pm May’s pitch for customs plan guarantees.
• Canada’s Trudeau: even if a new NAFTA is postponed indefinitely, it will always make sense for U.S. And Canadian firms to invest and work together.
• Canada’s Trudeau: close to a deal on NAFTA, progress has been made.
• Canada pm Trudeau says NAFTA sticking points are sunset clause and dispute resolution.
• Canada's Trudeau says current proposals on autos content are broadly acceptable to industries in three NAFTA nations.
• Ryan: still possible for us congress to review NAFTA deal.
• Mexico Guajardo: US tariffs on Mexican steel wouldn’t make sense.
• Says no date set for next NAFTA ministers meeting.
• President trump says doubts China trade talks will be successful.
• EU's Juncker says EU ready to start talks on more energy cooperation with US if gets unlimited exemption from US tariffs;
• -Ready to discuss reform of WTO with US.
• Fed's Kashkari says low wage growth is a big conundrum; one theory is there is more slack in labor market than 3.9pct jobless rate implies.
• Kashkari says wages may be slow-growing because businesses may have more bargaining power than labor, expected more growth than have seen.
• Fed's Kaplan: U.S. Economy is either at or past full employment, recession not likely.
• Fed’s Kashkari says Fed does not think there is a national bubble in housing.
• Saudi, UAE energy ministers voice concerns about recent oil market volatility, fueled by anxiety over geopolitical events despite ample supply - joint statement.
• Saudi, UAE energy ministers say agree to continue their consultations and to closely monitor oil market .
• Saudi, UAE energy ministers vow to work with other producers within established mechanisms to ensure market stability.
• Saudi, UAE energy ministers renew their commitment to security of supply and to work towards interest of consumers and health of global economy.
• Saudi, UAE energy ministers say to meet with Russian counterpart in St Petersburg next week.
• ECB's Nowotny says: "Some ECB governing council members including me think that we should not wait too long until we normalize monetary policy".

Federal Reserve Bank of Philadelphia:

Results from the may manufacturing business outlook survey suggest a pickup in growth of the region’s manufacturing sector. The survey’s indexes for general activity, new orders, shipments, and employment increased from their readings in April. A notable share of firms also reported higher prices for their own manufactured goods this month. The survey’s future indexes, measuring expectations for the next six months, reflected continued optimism.