Energy
1. Let’s begin with the energy markets where crude oil prices hit the highest level in a year.
2. Part of the reason for the rally was another unexpected dip in US oil stockpiles.
3. Moreover, crude oil imports declined more than expected.
4. On the other hand, US total oil production (that includes Alaska) has been stable since June. As prices rise, it’s only a matter of time before US production ramps up again – capping further appreciation.
The Permian Basin oil firms, for example, have been effective in maintaining and even growing production by drilling sideways (significant distances) and raising oil well efficiency.
Source: Bloomberg.com; Read full article
5. A sudden rise in gasoline imports contributed to higher-than-expected inventories.
6. The divergence in inventory trends for oil and gasoline resulted in a price performance gap.
Canada
Related to the oil rally (above), Canada’s stock market is pushing higher.
Emerging Markets
1. Since we are on the topic of energy, the prolonged period of crude oil price weakness is forcing the Saudis into the debt capital markets. The nation issued the largest emerging markets bond in history. Here is a bit of background.
Source: @WSJ; Read full article
2. Argentina’s retail sales were softer than expected. Nonetheless, the nation’s stock market rise has been spectacular.
3. Chile’s stocks also had a great week.
4. Brazil’s central bank cut interest rates as expected and as the bond market shows, there is more to come.
5. Mexico has become increasingly reliant on exports to the US since the implementation of NAFTA. That’s why a Trump victory would be seen as a negative for the peso.
Source: Credit Suisse, @NickatFP
By the way, the peso rose further after the last presidential debate on Wednesday night.
6. The Philippine stock market had another great day on the “pivot to China” policy.
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