Data from Statistics Canada indicated today that Canada’s trade deficit unexpectedly expanded to C$2.53 billion in December as imports grew faster than exports for the second month in a row. Imports rose by 1.5% to a record C$49.70 billion on increases in nine of eleven sections while volumes posted a 1% gain.
The Dow lost over 1,000 points at the close yesterday, as inflation concerns pushed stocks down. The negative movements started on Friday after a report showed that US wages increased at their fastest pace in eight and a half years. US Futures point to another negative day for stock markets today as a sell-off continues worldwide.
While investors grow concerned that inflation will rise and the Federal Reserve will increase interest rates more than expected, the 10-year Treasury note fell to 2.708% while the 30-year Treasury note decreased to 3.005%. The movement in bond prices has contributed to market volatility. As bond yields rise, prices fall.
The CBOE Volatility Index reached its highest level since August 2015, crossing above the 40-level as US stocks continued their wild ride. Since 1990, the index’s average has been 19.3, but during the past three years of market calm, that figure has been below 13.
The Reserve Bank of Australia left their cash rate unchanged at 1.50% yesterday. Two more central banks will draw some attention this week with key rate decisions from the Reserve Bank of New Zealand and the Bank of England, Wednesday and Thursday, respectively.
Oil prices are down on the day with Brent Crude and WTI Crude both down over 1%, currently trading at roughly $66.75/barrel and $63.45/barrel, respectively, at the time of writing.