Commodities

Copper is likely to enter another year of deficit, but stocks are still elevated and will cap price gains. While capex cuts have been aggressive, it will take time for supply to fall. Projects in pipeline are unlikely to be cancelled Investors optimisticCopper has rallied 40% since January 2016, erasing… Read More »

Brent crude oil is struggling to move beyond USD57/bl since its rally last November when it rose +USD10.10 per barrel. The market has turned “flat as a pancake” as Brian Gilvary, BP’s CFO said. Oil is trading between USD52/bl and USD57/bl. OECD commercial inventories are still 280 MMbbl above their… Read More »

While the US Federal Reserve (Fed) will increase rates this year, inflation will remain stubbornly high, maintaining a low real rate environment. Gold prices could rise 8% in the first half of the year, aided by a weaker US Dollar (USD). However, USD strengthening in the second half of the… Read More »

Markets are giving the US President the benefit of the doubt on his tax cutting and infrastructure spend promises, but we question his ability to negotiate a higher debt ceiling to execute on these promises. We believe Trump’s election pledges are likely to be watered-down over time, which could deflate… Read More »

After dropping for seven consecutive weeks following Donald Trump’s election, gold started staging a relief rally at the end of December as the dollar consolidated, bond yields took a breather and the equity markets ebbed and flowed. Add to that some bargain-hunting as well as support from traditional buying in… Read More »

Oil is an important commodity that investors track with great interest, but how best to judge the key trends – and what are the main nuances of the market? The Organisation of the Petroleum Exporting Countries, otherwise known as OPEC, recently agreed a deal where the cartel would cut production… Read More »

One month on from upgrading our European Mining industry view to Positive, we round up developments on the macro, commodity and equity-specific fronts. Macro data has generally been supportive. Earnings momentum continues to underpin equity outperformance, with upgrade pressure concentrated in the bulk commodities and diversified equities, where valuations remain… Read More »

Speculative positioning in both sugar and coffee appear over-extended. Sugar rally to run out of steamSugar has gained over 80% since February 2016 as the market is expected to have entered a second consecutive year of a production deficit. Prices are now trading at a 5-year high.The futures market has… Read More »

Aussie dollar has tracked global commodity prices higher in 2016, but soft domestic conditions will pressure the local currency. Corporate earnings have remained lacklustre, just 5% above the multi-year lows Commodity price reboundThe Australian Dollar (AUD) is one of the major global commodity currencies, as its economy is closely tied… Read More »

Recent comments by Saudi Arabia and Russia point to a greater probability of a production cut, although higher production from Libya, Nigeria and Iraq are reducing the odds of such a deal rebalancing the oil market in 2017. The post-Algiers rally in oil prices has continued, fueled by comments by… Read More »