El Niño and La Niña: Two Natural Events Affecting the Market
Every couple of years, two little siblings take turns in tormenting global markets. El Niño and La Niña (meaning “boy” and “girl” in Spanish) take the shape of hot and cold waters traveling across the Pacific Ocean from South America to Southeast Asia, unfolding all sorts of horrific scenarios.
In normal Pacific times, trade winds (those blowing east to west just north and south of the equator) blow across the ocean, carrying warm waters from South America to the western shores of Asia, leaving behind resurfacing cold water in a phenomenon known as upwelling.
But sometimes, one of the two siblings makes an appearance when unusual changes in ocean temperature occur. El Niño pays his respects when trade winds are not strong enough to carry warm water all the way west of the Pacific and instead settle east. When trade winds are stronger than expected, La Niña shows up, pushing the warm water towards Asia with increased upwelling. This movement uplifts nutrient-rich cold waters from the depths of the ocean.
El Niño’s temperate waters bring warmth and dryness to the northern parts of the U.S. and Canada, in addition to Central America, Southeast Asia, and Europe, while the rest of the globe experiences wetter-than-usual seasons. Meanwhile, La Niña has the opposite effect. Both events are characterized by mild and other times severe cases of crop damage, forest fires, and drought, lasting between 9 to 12 months on average.