Nitesh Shah -
Sugar, coffee and soybeans have made spectacular returns this year, but much of their gains have been driven by currency movements, particularly the Brazilian Real Brazilian Real drives rallyThe El Niño weather pattern led to a failed monsoon in India and unseasonably wet weather in South America in 2015/16.However at… Read More »
Morgan Stanley Research -
Real yield differentials will become increasingly important for FX markets, but there are two ‘types’ of real yields to study. One is driven by risk premiums often seen in high-yielding currencies and the other by falling inflation expectations. In countries where the idiosyncratic stories are improving, risk premiums have started… Read More »
Stronger Q1 2016 earnings coupled with the rising price of gold helped improve sentiment towards gold miners, driving the rally so far. Gold miners tighten their belts too much too fastGold miners have skyrocketed since the start of the year, staging a 81.6% rally. That is the strongest 6-month rally… Read More »
China is both one of the largest producers and consumers of most commodities. Yet financial centres in the UK and US are responsible for setting global prices for many commodities. China and commodity demandChina’s role in the upward phase of the commodity supercycle remains largely undisputed: resource-intensive economic growth, led… Read More »
Single commodities are subject to specific and sometimes unique factors which drive price trends to be distinct and for volatility to be elevated. In this instalment, we take a closer look at some of the most important drivers responsible for the volatility seen in single commodities and how to mitigate with… Read More »
Uncertainty over the US Federal Reserve (Fed) policy, risks of the UK exiting the EU, a China slowdown and a lacklustre earnings season in developed markets have all contributed to greater volatility in asset classes. We continue to expect further weakness in the US dollar in the coming month, primarily… Read More »
Martin Arnold -
Gambling odds turn favourable for the ‘remain’ camp as political polls show tight referendum result.? Adverse economic impact is expected to outweigh regulatory and fiscal benefits of the UK leaving the EU.? Pessimistic sentiment is at the highest level on record in the FX options market for EUR/GBP. GBP should… Read More »
James Butterfill -
The US Federal Reserve (Fed) has made a policy mistake. After raising rates for the first time in nine years, the Fed has held back from further hikes in 2016, bowing to market tantrums. The Fed is struggling to focus on the strength of domestic fundamentals such as the strong… Read More »
Over the last three weeks oil markets have peaked. The Brent oil price has gained 30% and is currently trading at USD 40.50/ bbl. There are three reasons for this rally: rumours of a possible agreement between oil producers to control output, signals that non-OPEC production is falling, and the… Read More »
The price of energy and oil, more specifically, is so heavily determined by shorter-term, cyclical factors that constructing an actionable longer-term view is challengin Despite that, a number of influencing factors are likely to endure for some time: further enhancements to drilling technology, continued environmental pressure, and increased development and… Read More »
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