This was the week: Another leg down in oil
Oil prices continue taking two steps down, one up. Prices tumbled down once again alongside stock markets. The recoveries were shallow the prices of black gold, whether Brent or WTI, are the lowest levels in more than a year.
Worse off, Canadian crude sells at a discount, so prices are even lower. An increase in inventories and Trump’s happy tweets about falling oil prices may be seen as the triggers for the most recent slide, but the broader picture is of oversupply and not enough demand.
Canadian events: GDP stands out
Oil prices remain on center stage, with the weekly inventory report on Wednesday standing out. Any comments by Saudi Arabia, Russia or Trump on prices may also move the price and the Canadian Dollar.
In addition, there are a few noteworthy economic releases. Canada’s Current Account for Q3 is due on Thursday and will likely show another deficit. The monthly trade balance numbers occasionally show a surplus.
The most significant release is on Friday with the GDP report. This time, the publication is for September, the last month of Q3, which means Canada also publishes the quarterly number.Q2 was a “comeback” quarter with 2.9% QoQ after a soft path in Q1. Growth may have slowed down in Q3.
Here is the Canadian calendar for this week:
US events: FOMC Minutes, GDP update, and the trade summit
After a light week on the US calendar, the last week of November is packed. Housing figures kick off the week in earnest on Tuesday. The sector has shown signs of a slowdown.
The most important economic indicator is due on Wednesday with the second release of Q3 GDP. It will likely be along the lines of the first release, which showed an annualized growth rate of 3.5%, slower than Q2 but quite impressive in absolute terms. However, a high growth rate of inventories and a drop in exports are causes for worry. The components matter no less than the headline figure.
