The US crude oil inventories is a closely-watched number as it suggests the pick-up or slow-down in the US economic activity. Also, because Canada is a big exporter of oil products to the United States, it creates volatility on both USD and CAD pairs when missing the forecast.  Yesterday it missed the forecast. U.S. crude oil inventories rose by 5.7 million barrels on expectations of a decline of -3.2 million barrels. In other words, the…

The new coronavirus affected the world’s economies on an unprecedented scale. Developed, developing, emerging, and frontier markets alike barely cope with the challenges posed by the outbreak. The more we go without a clear solution to the health problem, the deeper the economic recession. In economic terms, the first sign of a declining economic growth is called contraction. An economy that keeps contracting with no meaningful bounce enters recession. Acute recession without a steady recovery…

The trading week started with a strong performance of the Chinese stock market. Effectively, every retail trader rushed to buy Chinese stocks, as the government “suggested” over the weekend that a strong equity market helps economic performance.  Indeed it does. Economic studies showed that stock market performance is a leading indicator of economic growth. Higher stock market prices increase consumption due to the wealth effect – investors perceive their wealth increasing together with the value…

The monthly JOLTS (Job Openings and Labor Turnover) report is a closely-watched economic data out of the United States, further detailing the state of the labor market. Before interpreting it, though, investors should know that it does not refer to the previous month, but to the month before.  As it is released forty days after the month ends, the tendency is to ignore its contents. For instance, yesterday’s release refers to May 2020, while we…

Gold is one of the closest viewed assets in a recession. That is especially true when inflation threatens to get out of control as gold is considered a hedge against inflation. Moreover, it tends to outperform equities in environments when inflation gets above trend.   So far, inflation is not picking up consistently anywhere in the developed world. Naturally, this raises the question of what is the price of gold doing at the $1800? Some Interesting…

The Reserve Bank of Australia (RBA) kept the cash rate unchanged at 0.25% as it released its monetary policy decision today. The decision, highly expected, did not have an influence on the currency market’s volatility, although the Australian Dollar (AUD) reacted weakened somehow shortly after.  The RBA and the Australian Dollar (AUD) The Australian economy is for the first time in a recession following decades of economic growth. At one point, Australia was the envy…

Summer for the trading/investing community is typically characterized by slow market activity and investors taking less risky decisions than usual. Holidays are on everyone’s mind, and the good weather offers a strong incentive to relax. This summer, though, is a bit unusual. The coronavirus pandemic changed everything, and there is no time to leave the guard down. U.S. Elections on the Horizon While still early, the U.S. election is likely to be responsible for the…

A monthly leading economic indicator for the Euro area, Sentix reflects investors’ confidence and is based on a survey of more than 2600 investors and analysts that rate the six-month economic outlook in the Eurozone. It improved moderately in July, to -18.2 from a previous release of -24.8.  To put things into perspective, the Sentix index is interpreted based on the zero level – above indicates optimism, below indicates pessimism. Third Consecutive Increase in the…