OIL & CURRENCY MARKETS
Since August, both crude oil and currency markets have been influenced by lower economic growth expectations in countries outside the United States. Prices in both markets recently broke out of established trading ranges, driven by concerns about weaker future global demand. The current situation, with the dollar index and oil prices moving in opposite directions, presents a sharp contrast to one in which crude oil supply disruptions or geopolitical risks would cause both the dollar index and crude prices to rise.
Although the U.S. economy showed robust growth in the third quarter of 2014, recording an estimated 3.5% growth rate, economic data from Europe and China have led to expectations of potentially weaker demand for crude oil. Eurozone gross domestic product (GDP) growth was 0.2% in the third quarter, and inflation was low at 0.3% and 0.4% in September and October, respectively. In China, third-quarter GDP growth was 7.3%, the lowest annual growth rate since first-quarter 2009.
The divergence of growth expectations between the United States and the rest of the world is also reflected in currency markets. As economic growth slows in countries other than the United States, it increases the likelihood that their central banks will implement further steps to stimulate growth, like the recent announcement of rate cuts and quantitative easing by the European Central Bank and the Bank of Japan. In the United States, stronger economic growth led the Federal Reserve to end its quantitative easing program and raises the possibility of increases in interest rates next year. These opposing shifts in monetary policy had the combined effect of increasing the value of the U.S. dollar against other world currencies (as measured by the U.S. dollar index) by 8.1% from August 1 to November 17.
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AOG - The Dubai Electricity & Water Authority (DEWA) is to invest around $22bn on new energy projects across the next five years, with the renewables sector accounting for an increasing share of electricity generation, according to CEO Saeed Mohammed Al Tayer.
TRANSCANADA - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Company) announced net income attributable to common shares for fourth quarter 2017 of $861 million or $0.98 per share compared to a net loss of $358 million or $0.43 per share for the same period in 2016. For the year ended December 31, 2017, net income attributable to common shares was $3.0 billion or $3.44 per share compared to net income of $124 million or $0.16 per share in 2016.
ROSATOM - February 13, 2018, Moscow. – ROSATOM and the Ministry of Scientific Research and Technological Innovations of the Republic of Congo today signed a Memorandum of Understanding on cooperation in the field of peaceful uses of atomic energy.
FRB - Industrial production edged down 0.1 percent in January following four consecutive monthly increases. Manufacturing production was unchanged in January. Mining output fell 1.0 percent, with all of its major component industries recording declines, while the index for utilities moved up 0.6 percent. At 107.2 percent of its 2012 average, total industrial production was 3.7 percent higher in January than it was a year earlier. Capacity utilization for the industrial sector fell 0.2 percentage point in January to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2017) average.