With oil prices dipping below $30 and dire forecasts for the already-low Canadian dollar, the National Hockey League (NHL) is taking a hit that would normally lead to a mass exodus of players to Russia - if the ruble wasn’t tanking as well.
Canada’s oil “dream” is dying thanks to the inexorable slide in crude prices and as the IEA made clear earlier today, the pain is set to persist for the foreseeable future as the world “drowns in oversupply.” Now, the Bank of Canada must make a choice: cut to support the economy and the country's dying oil patch, or hold to shore up the plunging loonie. Whatever the BOC decides on Wednesday, some say the country's depression means NIRP is right around the corner.
- Spot the common thread: China's growth hits quarter-century low, raising hopes of more stimulus (Reuters)
- And here: China stocks climb on hopes for new economic stimulus (Reuters)
- Welcome to the Crisis Economy, Where Tumult Reigns (WSJ)
- IEA Sees Risk of World Drowning in Oil (BBG)
- IEA Sees Iran's Return Intensifying Battle for Europe Oil Market (BBG)
- China 2015 power, steel output drop for first time in decades (Reuters)
Gold retains a key role of a major diversifier in well-structured retail investment and pension portfolios ... core defensive and hedging properties vis-à-vis global currencies and fixed income, as well as oil and a range of other commodities.
Central banks have lost their aura of omnipotence.
With the US closed today for Martin Luther King Holiday, global risk tone has once again been set entirely by oil, which opened sharply lower at fresh 12 year lows on fears of an Iran oil glut, but has steadily rebounded on the latest OPEC comments, and at last check both WTI and Brent were unchanged trading in the low $29's on muted volume. With Asian markets mixed, European shares swung between gains and losses, while the yen weakened as China stepped up efforts to curb foreign speculation against its currency. Crude oil rose from a 12-year low after the Organization of Petroleum Exporting Countries forecast a decline in supplies from rival producers.
Global Risk Off: China Reenters Bear Market, Oil Tumbles Under $30; Global Stocks, US Futures GuttedSubmitted by Tyler Durden on 01/15/2016 07:57 -0400
Yesterday, when looking at the market's "Bullard 2.0" moment, which in many ways was a carbon copy of the market's response to Bullard's "QE4" comments from October 17, 2014 until just a few minutes before the market close when suddenly selling pressure appeared, we said that either the S&P would soar - as it did in 2014 - hitting all time highs just a few months later, or the "Fed is now shooting VWAP blanks." Judging by what has happened since, in what may come as a very unpleasant surprise to the "the market is very oversold" bulls, it appears to have been the latter.
"The Alberta Public Service is made up of hard working and dedicated women and men who do valuable work each and every day in the service of Albertans. However, to maintain stability and protect jobs within the public service, we must deal with the economic realities we’re facing.”
- Islamic State launches militant assault on Indonesia's capital (Reuters)
- Three winners emerge in $1.6 billion Powerball jackpot (Reuters)
- European Stocks Tumble, Credit Markets Weaken on Growth Concern (BBG)
- Stocks and commodity currencies floored by new oil plunge (Reuters)
- China Bear Market Looms as PBOC Fails to Stop Flight to Safety (BBG)
- Anxious phone calls, tense moments before Iran's Supreme Leader okayed U.S. sailors' release (Reuters)
For most investors, the major story of 2015 was the expectation and eventual fulfillment of a rate hike, signalling the start of tightening monetary policy in the United States. This policy is divergent to those of other major central banks, and this has translated into considerable strength and momentum for the U.S. dollar. Despite this strength, the best performing currency in 2015 was not the dollar. In fact, the top currency of 2015 is likely to be considered the furthest thing from the greenback.
- Weakness in the Canadian Economy driving its currency lower
- Inverse relationship between commodity prices and USDCAD exchange rate
- Why there could be a reversal in trend
How did the Canadian currency reach a twelve year low?
The US Dollar reached a recent high against CAD at 1.41081 on January 6th a level not seen since August 2003. The general bull trend the green back has been in picked up momentum since talk begun by the Fed of a return to higher interest rates.
WTI Crude prices just broke back to a $35 handle for the first time since mid-December as the combination of un-growth, Saudi price cuts, a rancorous OPEC, and production increases weigh on the world's most important commodity. At the same time, oil producers are getting hit with the Canadian Dollar plunging above 1.4000 to its lowest since 2003...
With markets wrapped up for 2015 now, reviewing the performance of asset classes last year shows that it was one where negative asset class returns were aplenty, while those finishing in positive territory were few and far between. Indeed, of the 42 assets we monitor in Figure 5, just 9 finished with a positive return in Dollar-adjusted terms over the full year. At the other end of the scale there were some notable losers.
It has come down to this: a year in which the US stock market (led by a handful of shares even as the vast majority of stocks has dropped) has gone nowhere, but took the longest and most volatile path to get there, is about to close either red or green for 2015 based on what happens in today's low-volume session following yesterday's unexpected last half hour of trading "air pocket" which brought the S&P back to unchanged for the year.