Here Are the Markets Moving on Report Trump Will Scrap Nafta (2)

(Bloomberg) -- Mexico’s peso, the Canadian dollar and shares of companies that rely on cross-border trade plunged on speculation the Trump administration was close to scrapping Nafta. The moves slowed a surge in riskier assets sparked by President Donald Trump’s promise to unveil Wednesday a proposal to overhaul U.S. taxes.

The administration has prepared a draft of an executive order to withdraw from the trade accord, Politico reported Wednesday, citing White House officials it didn’t identify. The move is still under internal debate, according to the article. It was published just days after Trump levied a tariff on imports of softwood lumber from Canada, decrying unfair competition. A week ago, the U.S. president called Nafta a “disaster.”

"People are getting more nervous after the U.S. imposed a tariff to Canada," said Andres Jaime, a foreign-exchange strategist at Barclays Plc in New York.

1) The Mexican peso dropped the most since January.

2) Shares of Kansas City Southern, which gets half its revenue from Mexico, plunged as much as 4.7 percent after the report.

3) Canada’s dollar reversed earlier gains.

4) Mexican auto-parts maker Nemak SAB sank to a two-month low.

5) Magna International Inc., a Canadian parts supplier, erased a gain and traded lower.

6) The cost to insure Mexican government bonds against default jumped the most in a month.

7) Corn futures for July delivery fell 1.6 percent, the sharpest decline in four months.

(Updates to add corn move. A previous version of this story was corrected to fix the name of Politico.)

--With assistance from Luke Kawa

To contact the reporters on this story: Isabella Cota in Mexico City at icota@bloomberg.net, Ben Bartenstein in Lima at bbartenstei3@bloomberg.net, Michelle F. Davis in Mexico City at mdavis194@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh

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