With crude oil at 52-week highs, we examine which country indexes show the most positive correlations to liquid gold.

The broad international equity space remained relatively steady with the market volatility in domestic equity markets over the past few days, with the iShares MSCI ACWI ex US ETF ACWX actually advancing 0.20% in trading Tuesday.  Emerging markets saw a bit more movement, with EEM reversing down into a column of Os from overbought territory, while the broad developed market representative EFA remained steady in a column of X's. Although international equities have not shown that much movement to the downside, the asset class has shown some weakening in relative strength over the past few days in the DALI asset class breakdown to now only be sitting nine buy signals ahead of commodities. This is not due to the technical deterioration of international equities, but rather the technical improvement from the broader commodities space, as that asset class has picked up 20 buy signals since last Friday alone. Much of this stems from the price appreciation of Crude Oil CL/, which broke a second consecutive double top at $63 in trading Monday. The combination of a cold winter harming domestic crude oil production as well as the continued positive expectations surrounding potential increases in travel has boded well for crude oil, which sits atop the 21 representatives in our Continuous Commodity Matrix rankings.

In order to see which countries may be more or less affected by crude oil prices, we ran correlations on each of the 43 NDW country indices compared with CL/ over a 36-month trailing timeframe ending February 23. The results of these comparisons can be found below, along with some observations.

• Each of the country representatives shows positive correlations to CL/, with an average correlation of 0.6063 and a median of 0.6156.
• Developed markets tend to have more positive correlations than emerging markets.
• Countries found in the top quartile of our RS rankings (as denoted by the BUY rating) that also possess higher than average correlations to crude oil include Australia, Sweden, the Netherlands, Colombia, and Finland.
• Austria and the Czech Republic are two areas in the second quartile of the RS rankings that have each shown RS improvement in recent months and have higher than average correlations to Crude. These could be areas to monitor for further improvement if CL/ continues to rally.