There could be a major breakthrough in NAFTA renegotiations. The Globe and Mail is reporting the U.S. has abandoned its divisive demand that autos exported from Mexico or Canada into the United States are at least half-built with U.S. content. The report indicates the Americans backed off their demand in meetings last week when Foreign Affairs Minister Chrystia Freeland was doing the rounds in D.C. The development comes amid a sense of urgency in Washington (where Commerce Secretary Wilbur Ross said yesterday NAFTA will be “kicked over for quite a little while” if there isn’t a resolution within the next month) and some optimism within the Canadian camp (with Ambassador David MacNaughton quoted as saying there’s been “substantive progress”).

AWAITING POWELL

Investors are convinced it’s a lock that the U.S. Federal Reserve will raise its target range for the benchmark federal funds rate today at Jerome Powell’s first policy meeting as chair of the American central bank. The real story will be in the infamous dots, which illustrate each FOMC member’s view of where rates should be at year end. Up until now, the dot plots have indicated the bank is on course to raise rates three times this year. But in his first round of Congressional testimony, Powell hinted four could be in the offing. At 2:00 p.m. ET, we find out if that’s the consensus.

Leading up to the decision, futures are little changed, the U.S. dollar index is hanging out near its lowest level since 2014, and 10-year U.S. Treasury yields were last seen at 2.89 per cent. 

The basic questions for today:

            -How will markets respond if Powell’s Fed adopts a more hawkish tone?

            -What would 3 per cent 10-year yields mean for investors and consumers?

            -What’s the spillover effect for Canada, where we know Governor Stephen Poloz doesn’t appear to be in a rush to boost rates.

ALBERTA BANKS ON TRANS MOUNTAIN

Alberta Finance Minister Joe Ceci says he’s going to reveal his plan to balance Alberta’s books by 2023 when he tables the province’s budget tomorrow. Problem is, he’s already indicated that plan is going to be at least in part built on an assumption that Kinder Morgan Canada’s controversial Trans Mountain expansion project eventually sees the light of day. Prudent fiscal management? That’s the question to consider in the lead up to the budget.

FACEBOOK LATEST

The company’s shares remain under pressure, extending losses in pre-market trading, and CEO Mark Zuckerberg remains mum. Bloomberg is reporting he’ll speak to staff at a meeting on Friday; and despite the fact he’s been keeping a low profile, a company spokesperson says both Zuckerberg and COO Sherry Sandberg “are working around the clock to get all the facts and take the appropriate action moving forward.”

TRUMP TARIFFS

The Wall Street Journal is now reporting the Trump administration will release its plan to hit Chinese imports with tariffs amounting to at least US$30 billion after U.S. vulnerable domestic industry players have a chance to comment on precisely what the White House should target. The Journal says Trump will also place investment restrictions on Chinese entities operating in the U.S. The announcement is anticipated tomorrow.  

OTHER NOTABLE STORIES:

-Bayer has won a key conditional go-ahead for its takeover of Monsanto. The European Commission said today it will allow the $86B purchase, so long as both companies sell certain assets. Bayer still requires the U.S. Justice Department's blessing for the deal, which it hopes to complete in the second quarter of this year. 

-The company formerly known as Penn West is facing a proxy fight with an activist shareholder. Obsidian Energy expressed disappointment this morning after Zachary George's FrontFour Capital said it will nominate four directors at Obsidian's upcoming annual meeting.

-Shares of First Quantum Minerals remain halted and the company is hosting a conference call at 9:00 a.m. ET in an attempt to clear the air after it disclosed Zambia’s taxman is claiming the miner owes 76.5 billion Zambian kwacha ($10.4 billion). First Quantum says the notice of assessment “does not appear to have any discernable basis of calculation”.

-There’s a strong local angle in the denouement of a long-standing Euro corporate saga. Vivendi announced yesterday it’s exiting its stake in game maker Ubisoft, with Ontario Teachers’ Pension Plan stepping in to fill at least some of the void.

-Brookfield Asset Management is teaming up with Singapore’s Global Logistic Properties on solar power development projects in China; Bloomberg reports it’s a US$2-billion joint venture.

NOTABLE RELEASES/EVENTS

-Notable earnings: BRP, AGT Foods, New Flyer Industries

-Notable data: U.S. existing home sales

-9:00 a.m. ET: Transport Minister Marc Garneau announcement on road safety in Gatineau 

-10:00 a.m. ET: U.S. Trade Representative Robert Lighthizer testifies on U.S. Trade Policy Agenda before U.S. House Ways and Means Committee

-2:00 p.m. ET: U.S. Federal Reserve releases interest rate decision and updated forecasts (1400)

-2:30 p.m. ET: U.S. Federal Reserve Chairman Jerome Powell holds news conference (1430)

-3:30 p.m. ET: Justin Trudeau delivers remarks at UPS Management Conference in Toronto

-4:20 p.m. ET: Trudeau holds media avail in Toronto

-University of Toronto Rotman School of Management starts two-day conference on lessons learned from the financial crisis (list of speakers here)

Every morning BNN's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.