Oil Shock of 2020

In the midst of the current economic turmoil when tens of millions of people have filed for unemployment, the gap between financial markets and the real economy is unsustainable. What it implies is that demand for oil is likely to remain subdued at least in the foreseeable future. Continue reading Oil Shock of 2020

USD & Oil Prices: Their Weakening Correlation

Over the past years, however, their ordinarily inverse relationship has considerably weakened. The following graphs show the correlations between USD and the crude oil prices for the period of the first oil crisis, 1973-1975, and the more recent period of 2016-2018 (Fig1; Fig.2). Continue reading USD & Oil Prices: Their Weakening Correlation

Summarising The Global Economy Today (10 October 2018)

In early October 2018, the global economy is as dynamic as ever and the relationships amongst (1) rising oil prices, (2) strong US economic data, (3) mounting inflation pressure, (4) higher interest rate expectation, (5) downward pressure on the US equity market, (6) the strong US dollar, and (7) its pressure on emerging markets can be summarised in the diagram below. Continue reading Summarising The Global Economy Today (10 October 2018)