Crude oil drops once again
The interlude in collapsing oil prices ended up only lasting one short day. Financial markets are back in the red this morning, with crude oil leading the downward charge. With oil trading this morning at a 12-year low, investors are preparing once again for growth in U.S. reserves to be announced Thursday. Almost all major stock markets are in negative territory this morning, with China giving up 2% over the trading session, Europe losing 3% and North American markets appearing poised to open down 2%.
The market context is therefore a jittery one for the Bank of Canada’s key rate announcement this morning at 10 a.m. As we go to press, bond markets are pricing the likelihood of a BoC rate cut at 58%. Unfortunately, this ambivalence has the potential to create surprise upward or downward movements in the USD/CAD pair. The loonie now sits at its lowest level since April 2003.
