Data today showed the US consumer is strong and normally that would be good news for oil but it's China that's currently the concern. The PBOC surprised with a rate cut today but it was coupled with disturbingly-slow economic data and that's what is dragging down the oil market.
WTI crude oil settled lower by $1.52 to $80.99. It's the first close below $81 since Aug 2 and the intraday low of $80.40 is the worst level in a week. Post-settlement, it has made some progress and is trading at $81.08.
Looking ahead, the macro dynamic will continue to unfold but there are also supply-demand worries in oil itself as OPEC+ tightens the screws on the market. There's a consensus that the market is currently short of about 2 million barrels per day. That's pulling barrels out of inventories and putting pressure on prices.
In the FX market, the Canadian dollar is caught between a slowing domestic economy and a climb in crude over the past month. If crude stumbles, the stars will begin to align for pronounced Canadian dollar weakness.