WTI crude daily chart
WTI crude daily

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.