Oil Rally Driving Loonie Higher

Wednesday, June 27, 2018

Renewed strength in the price of oil is driving the loonie higher this morning. Falling crude stockpiles and US demands for countries to stop buying Iranian oil are contributing to this rally. There are no scheduled Canadian data releases today. However, Bank of Canada Governor Poloz will speak on the technical of Central Bank communication with markets. Although analysts do not anticipate his speech to explicitly indicate the Bank of Canada’s monetary policy plan, there may be hints, and the question period after may pull further information out.

The US dollar is trading flat after goods data out of the United States was mixed. Monthly core durable goods orders missed expectation (-0.3% vs. exp. 0.5%) while total durable goods beat (-0.6% vs. exp. -0.9%). Aiding in the crude oil rally, US inventories were a massive draw at -9.9 million barrels versus expectation of -2.4. Markets will be waiting on US final quarterly GDP numbers tomorrow.

Consumer confidence falling in France and manufacturing confidence falling in Italy are driving the Euro lower. There are signs political and economic worries are still factors the Eurozone needs to contend with heading into the EU Economic summit tomorrow.

Markets are up today with the up Dow 1.07%, the S&P up 0.74%, NASDAQ up 0.18% and the TSX up 0.25%. Crude oil is strong and up 3.05% ($72.69) and Gold is down 0.21% ($1,257.30).


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