For the week of September 12 to 16
Oil prices tumbled back down to earth on Friday, closing down by 3.65 percent after an impressive climb of 4.66 percent on Thursday. Investors began to look through the large inventory drop reported by both the American Petroleum Institute and the Energy Information Administration as it became more apparent that this was a one-off drop caused by a reduction in imports due to tropical storm Hermine. However, the Energy Information Administration also said they see demand as exceeding supply as soon as the third quarter of 2016, suggesting the current oil glut could begin to moderate. Oil prices are down again this morning, falling by just above two percent to $44.96 per barrel.
Markets are becoming increasingly uneasy as the Fed’s policy meeting approaches and official’s speeches continue to remain titled to the hawkish end. As of now, the implied probability of a rate hike at this months meeting sits at 30 percent after increasing from as low as 20 percent last week. With more officials set to speak today this figure will likely continue to change. The probability for a hike in 2016 now sits at 51.5 percent.
Coming up this week, Manufacturing Sales data is expected to be released out of Canada on Friday and are expected to have grown by one percent for the month of July. In the United States, data is expected for Retail Sales, Business Optimism, Empire Manufacturing, Consumer Prices, and University of Michigan Sentiment.
The Canadian dollar is responding negatively to the continued fall in oil prices this morning and is currently trading down against the US dollar. Todays expected range is 1.3058 – 1.3158.
Posted by Concentra Financial Markets