The effects of OPEC talking production in the Nov meeting that took place on Sept 29th.

What’s being examined here is the correlation of oil and commodity currencies and how jawboning can change those correlations. The blue candles are the currency pairs labeled and then laid over a WTI chart showing that after Sept 29 the changes that have taken affect or not.

Ex. If you trade USD/CAD and look for CAD strength and price to fall you would typically expect Oil to rally and vise versa. However, that correlation is not working currently after OPEC’s Sept 29th statement as seen by both Oil & U/C moving in parallel since then. So, if your correlation trades for these two (or others) haven’t been working lately there’s a reason why and we can see when it changed. Chances are it will return to normal performance at some point in the future.

This can be seen on other pairs as well whether inverse or not. Notice that the jawboning has seemingly not affected other pairs as correlations remain the close to their past performance.

Hope you enjoy.

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