Jan 12th, 2016: Oil Slides Below $32

• The main themes of 2016 continue to play out across world markets with oil prices sliding below $32.00 yesterday, the lowest levels since 2004. Oil prices have now dropped by 16% (using both benchmarks) in the first trading week of the year. Meanwhile, the Chinese Renminbi continues to slide against the US dollar, with the main US markets down 6% this year to date.

• The big winner continues to be the global reserve currencies of the US dollar and yen, with the USD/JPY dropping again this morning.

• Commodity currencies made a good fist of a recovery yesterday, but are on the back foot once again this morning.

• The British pound continues to suffer as US and UK interest rate expectations diverge.

Coming up today: 

• Coming up today, we have UK manufacturing at 09.30.
• This is followed by BOE Governor Carney Speaking at 14.15.
• US JOLTS job openings follow at 15.00.

Trade Idea: 

• The USD/CAD continues to struggle in the face of plunging oil prices and with some analysts predicting $20 a barrel for crude, the USD/CAD could have higher to go.

• A good way to play this is a HIGHER trade predicting that the USD/CAD will close above 1.4400 in 21 days for a potential return of 205% if successful.

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