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Oil Prices Up; USD/CAD Moves Higher
Published October 16, 2017
Crude prices jump to start the week following reports that Iraqi troops clashed with Kurdish forces near Kirkuk, raising concern over potential output disruptions in the region. Brent Crude is trading slightly above $58.00 a barrel with WTI Crude trading above $52.00. Eyes will be on fresh weekly information on US stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
The greenback held onto its gains against other majors this morning, after the release of positive US manufacturing activity data and as political woes in Europe continued to weigh on the euro. Today’s data showed that the Empire State Manufacturing Index rose to 30.20 in October, beating analyst expectations of 20.30. This report charged some uncertainty over whether the Federal Reserve will decide to raise interest rates before year’s end.
Fed Chair Janet Yellen spoke on Sunday, saying that policymakers will be paying close attention to inflation data in the coming months. She affirmed that the American economy remains strong and the strength of the labour market calls for continued, gradual increases in interest rates, despite soft inflation.
Bank of Canada Governor Poloz also made fresh remarks over the weekend. He mentioned that Canadian growth will slow down in second half of 2017 as the economy starts to approach full capacity in the wake of a prolonged oil shock. He also suggested that although Canada’s economy as a whole had bounced back, there were still areas of weakness. He said further hikes to interest rates would be heavily data dependent. The central bank is due to release its next set of economic forecasts on October 25th.
The fourth in a series of seven scheduled NAFTA negotiations taking place in Arlington, Virginia has been extended by two days to a full week. The Trump Administration has presented a series of hard-line proposals that Canada and Mexico say will be tough to accept. That said, both Canada and Mexico remain committed to wresting out compromises from the US side. Lots of work to still do with not enough time, as officials are starting to look at possible dates for extra negotiation early next year.