Commodity-Driven Renewal In Risk Appetite Could Be Challenged By Upcoming Central Bank Decisions

Portfolio Advisory Group

March 9, 2016

The global equity market (MSCI World Index -3.3% YTD in USD) is moving in lockstep with commodity prices Thomson Reuters Commodity Index -3.8% YTD in USD) with both asset classes having erased much of the red ink spilled earlier this year. With a positive tone returning to commodities (see below), it should surprise no one that the commodity heavy S&P/TSX Composite Index is outperforming most global peers (+2.4% YTD in CAD, +5.6% in USD) and that CAD has appreciated 3.2% against USD since the beginning of the year. Although the rebound in sentiment for equities and commodities is welcome, continued U.S. economic progress and stabilization of global capital markets should return the market’s focus back on the Federal Reserve’s March 16 meeting.

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