After the Bank of Canada cut interest rates by a half-point on March 4, I wrote that the timing of its next move would be determined by oil prices. If I had thought to check the central bank’s measure of commodity prices, I might have been less surprised by the second cut nine days later.
The commodity-price index plunged almost 13 per cent between March 4 and March 11, the biggest move in weekly data that date back to 1972. Oil was the main factor, with the energy sub-index collapsing 21 per cent. The numbers are hard to look at on a spreadsheet, never mind a balance sheet where the figures take on a whole different meaning. The average change from week to week is usually about 0.1 per cent.
Continue reading at the Financial Post ...