The number of Americans filing for unemployment benefits rose to a six-month high last week, suggesting some loss of momentum in the labor market amid a sharp economic slowdown and major stock market selloff.
Whether we like it or not, it appears as though crude oil is driving almost everything at the moment. It has been correlating positively with the equity markets, which makes sense because of oil’s obvious impact on the energy stocks. In forex, the likes of the CAD, NOK and RUB have all suffered big falls, which also make sense because of the fact Canada, Norway and Russia are among the oil exporting countries.
It was another disappointing week for risk asset bulls. After showing signs of stabilizing early in the week, global stocks (led by Chinese equities) dropped off the map on Friday as concerns about the oil market once again spooked traders.
Earlier today, my colleague Fawad Razaqzada discussed the Nikkei 225 and whether Japan’s most widely-followed stock market index was forming a double bottom or merely seeing an oversold bounce. While the correlation is not perfect (no intermarket correlation is!) that bourse and many other equity indices are closely correlated with USD/JPY.
The number of Americans filing for jobless benefits fell last week and layoffs in December were the smallest in 15-1/2 years, pointing to a firmer labor market even as economic growth appears to have slowed sharply in the fourth quarter.