Recent Articles

Is the oil move different this time?

Oil & FX markets are intertwined with oil prices often inversely correlated to USD moves/trends (under normal market conditions/cycles). However, crude’s recent volatility/uptrend has left many to ponder whether the move higher in oil is different this time.


A number of significant shifts in global oil supply and demand dynamics have created new sources of price volatility that will continue to play out over the next few months. While global oil demand growth for 2018 remains unchanged at 1.4mb/d, emerging market consumption is expected to remain resilient, with China and India projected to see their combined demand grow by 910 kb/d this year.


U.S Shale production continues to trend higher, with the U.S now the largest producer in the world, overtaking Russia this past month according to the Energy Information Administration (EIA). However logistical limitations, pipeline congestion and temporary shutdowns of major production centres have pushed WTI higher and its discount to...

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Trump, Trade, and the Canadian Dollar

Trump threatens Canada with “the ruination of the economy”


While Canada’s chief NAFTA negotiator, Chrystia Freeland, and the US negotiator, Robert Lighthizer, left the talks on Friday without a resolution, the US President continued his approach of make threats today, then put a positive spin on things when he eases back pressure tomorrow.  Trump had originally placed a deadline of last Friday, or he would slap large tariffs on auto exports, leading to his comments on economic ruination.  For now, at least, he has not followed through on the threats. 


While Freeland has been consistent in her rhetoric that a new trade deal has to be one which is good for Canada, and has expressed, and continues to express belief that everyone at the table wants to achieve a solution that works for all three countries, the Canadian Prime Minister finally weighed in last week with his strongest words to date.  “We...

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UK economy feels more pain

This morning’s UK manufacturing PMI survey printed a reading of 52.8 for August, its lowest level in 25 months. Before we get too carried away with ramping up project fear, it should be noted that the survey shows the sector experiencing continued growth (just as it has done since early 2013, excluding a one-off post referendum dip in July 2016). That said, a quick look at the chart below shows a disturbing trend.


UK (red) EZ (blue) and US (green) manufacturing PMI


Source: Bloomberg


Clearly the trend isn’t limited to the UK… the same applies to both the US (which has stood out on the growth front in recent years) and the Eurozone (where surprisingly, manufacturing PMI readings were the highest between H2 2017 and H1 2018). These PMI surveys are widely regarded as forward-looking indicators since they are comprised of manager’s expectations about the months ahead so while the current climate appears...

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