For Week of August 2 – 5
After falling below $40 per barrel for a moment yesterday and closing at the lowest point since April, the price of oil is currently up by 1.17 percent to $40.53 per barrel. However, industry data oil won’t be pushing too far forward any time soon, as the worldwide rig count increased for the first time this year in June. Markets are still expecting the supply and demand equation to come into balance in 2017 and 2018. Both crude and gasoline inventories are expected to have fallen in the United States last week.
Japan announced they will be spending the equivalent of $61 billion on infrastructure with a goal to increase in tourism in the country. This stimulus is the first of a plan announced by Shinzo Abe last week. Infrastructure being targeted for improvements are ports, airport capacity, and other transportation hubs.
On Friday, Canada’s GDP numbers for the month of May reflected the financial hit taken due to wildfires in Fort McMurray ,as it posted its worst single month performance in over seven years. On a month-over-month basis, GDP fell by 0.6 percent from a month prior. A large contributor to this weak performance was an unsurprising drop in oil extraction (down by around 22 percent). However, the wildfire cannot be handed the total blame, as even without the drop in oil extraction the Canadian economy would have still seen a contraction of 0.1 percent.
Coming up this week, the Bank of England will be making a policy decision on Thursday, and the market has priced in a 100 percent chance of a rate cut after the central bank made a surprise decision to hold at their last meeting. It is a fairly quiet week for data in Canada, with the only notable release being employment numbers on Friday. With little data coming from Canada this week, the Canadian dollar will likely take most of its direction from movements in the price of oil. Today’s expected range is $1.3003 – $1.3103. In the United States this week, data is expected for factory orders, durable goods orders, trade balance, and employment.
Posted by Concentra Financial Markets