Daily Commentary

MarketMinder’s View: Here is an update on trade talks between the US and Canada. According to “Sources who were recently briefed on the matter,” trade negotiators, perhaps motivated somewhat by the Trump administration’s additional (if limited) 50% tariffs on select Canadian items set to take effect August 19, are nearing a draft deal to put in front of the US president and Canadian Prime Minister Mark Carney. Details are sparse on what is in the deal. Apparently talks have targeted not only avoiding the new tariffs, but lifting sectoral tariffs on Canadian steel, aluminum, lumber and autos—and negotiators are seeing it as a step toward an extension of the US-Mexico-Canada trade agreement. That seems like a pretty sizable list. Now, we don’t think this is hugely market-moving, as the USMCA is the key to it and that remains in force—and the new 50% tariffs will hit only about 5% of US imports from Canada. But if there is progress toward a deal (or deals) here, that would be a relief for stocks. (Perhaps most significant would be the aluminum tariffs, as these have been in place since early 2025 and the US has very little domestic production to replace it with—nor is much new production set to come on line in America. Canada has a comparative advantage here due to power costs that wouldn’t be easy to close.)

MarketMinder’s View: This article claims the German government is taking a huge gamble by not intervening and forcing its utilities to import vast quantities of natural gas now—ahead of winter—in order to fill reserves toward the 80% or 90% marks the European Commission sets ahead of winter. After all, gas heats some 30% of homes in Europe and is essential for Germany’s huge chemicals industry. But here is the thing: Those targets are arbitrary guides established in 2022, amid the panic and recession fear from clampdowns on Russian gas. The “risk” is basically that prices may rise. But they may also fall, if the Strait of Hormuz reopens and Qatari gas flows freely. Or US and Norwegian gas production and exports ramp up more. Or or or. Beyond this, it isn’t as if Europe would have little to no access to supply. Back in 2022, part of the issue was a lack of liquefied natural gas import infrastructure. That isn’t the case now. And even then, when prices were vastly higher than today, a hugely damaging recession didn’t ensue. In other words, the case for the government intervening now isn’t very strong—and intervention could actually cause prices to artificially boom today. For more, see our 7/31/2026 commentary, “Don’t Fret the EU’s Low Summertime Gas Storage Levels.”

MarketMinder’s View: Fears about UK Prime Minister Andy Burnham’s policies—and their fiscal ramifications—are still swirling, as evidenced by this piece (it also deals in politics, so a friendly reminder that MarketMinder is nonpartisan). With the autumn Budget set to be unveiled October 28, the article outlines several of Burnham’s policy proposals, including combatting homelessness, increasing council home building (i.e., public housing), higher defense spending and a slew of tax cuts. Echoing headlines’ griping in recent weeks, the article posits these measures risk putting the UK in “a funding gap of up to £60bn a year, amounting to some 2pc of GDP,” ostensibly cueing up future tax rises or higher borrowing—supposed negatives for government spending and Gilt yields, respectively. Anything is possible in politics, but we don’t see reason to fret from an economic or market standpoint here. For one, many of these measures’ (e.g., commercial property tax cuts for pubs and clubs, capping bus fares) costs aren’t huge relative to the UK’s tax receipts (nearly £940 billion in the tax year 2025 to 2026). “The 20pc cut in business rates for pubs and clubs will cost only about £100m per annum; capping bus fares at £2 will probably cost about £450m; and cutting VAT on electricity bills will probably cost only about £850m.” Secondly, and most importantly, these proposals are just … proposals. They aren’t yet policy, and the more contentious items may not even make it into the Budget. “Similarly, making social care free at the point of use, which is expected to cost just under £20bn per annum by 2035-36, will be the subject of much discussion and scrutiny before anything happens.” Rather, these rumors and trial balloons are part and parcel of politicians’ “silly season,” chiefly aimed at gauging constituents’ feelings toward certain ideas. Oh, and it is quite common for officials to scale back Budgets from their initial proposals, as seen in former Chancellor Jeremy Hunt’s milder-than-expected package in 2022. Or George Osborne’s in 2015. Or Rachel Reeves’s in 2024 and 2025. Overall, this seems like more evidence of lingering fears around the Burnham premiership—likely creating room for positive surprise if reality proves more benign than feared.