Digest

  • Restoring deterrence

    Restoring deterrence Cover image Published 20 Sep 2019 by
    Last night, six days after the attack on the Abqaiq facility, Saudi-led coalition forces carried out strikes against ‘military targets’ in Yemen. We believe this is the first step in trying to achieve three clear goals of the US and its allies in the region in confronting Iran and its proxies. On..

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  • Cart before the horse

    Cart before the horse Cover image Published 13 Sep 2019 by
    There was sense a of panic emanating from the White House this week. First, Trump suddenly (perhaps even impulsively) fired his national security advisor John Bolton, triggering frantic speculation in the oil market that the US was about to ease sanctions on Iran. This was followed within a day b..

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  • The spin cycle

    The spin cycle Cover image Published 6 Sep 2019 by
    Risk markets seem to be stuck in a spin cycle at the moment, getting jerked around by the constantly shifting flow of news and tweets. Given that markets have been in this weird place where bad news is bullish and good news is bearish, it is at least reassuring that the market rallied this week o..

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  • Running off the bulls

    Running off the bulls Cover image Published 30 Aug 2019 by
    Since mid-June, crude stocks in the US, Japan and ARA combined have drawn by 60 mb. But over the same period, Brent has fallen from a peak of $66 per barrel in late June to $58 per barrel in mid-August and is hovering just over $60 per barrel at the time of writing. The broader market continues t..

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  • Fishing for rate cuts in Jackson Hole

    Fishing for rate cuts in Jackson Hole Cover image Published 23 Aug 2019 by
    Judging by the size of the trading volume this week, it appears that many have decided to go on vacation for the rest of the summer. Liquidity is thin and, as such, there have been a number of wild intraday swings across risk assets, with notable short squeezes in the credit and crude markets. Ho..

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  • The new economic disorder

    The new economic disorder Cover image Published 9 Aug 2019 by
    Due to the summer holiday period, there will be no Macro Digest next week. The next Macro Digest will be published on 23 August. Risk assets got a boost late this week. The rally was driven by a market perception that the People's Bank of China (PBoC) is trying to stabilise the yuan rather than f..

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  • Oops, he did it again

    Oops, he did it again Cover image Published 2 Aug 2019 by
    Just as financial markets were beginning to digest the Fed’s decision on Wednesday to lower rates, President Donald Trump pulled the rug out from under the market on Thursday when he announced via Twitter that that the US would impose 10% tariffs on an additional $300 billion of Chinese goo..

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  • Tactical pivots

    Tactical pivots Cover image Published 26 Jul 2019 by
    After falling by some 24% over the course of April and May, oil prices found a near-term bottom in early June following the attacks on oil tankers in the Strait of Hormuz and right around when central banks began signalling an intent to ease interest rates. Since then, despite growing supply disr..

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  • Tech wars

    Tech wars Cover image Published 19 Jul 2019 by
    While many are hoping for a tactical bullish pivot in risk markets this week, it appears the only thing ‘rising’ is risk itself. Both the VIX (the Cboe options volatility index) and precious metals (historically safe havens during times of economic stress) are starting to rally, in pa..

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  • Bad is the new good

    Bad is the new good Cover image Published 12 Jul 2019 by
    There has been a fairly wide divergence between stocks and bonds, with the bond market sceptical of the optimism that has been present in the equity market since the start of the year and expressing greater fears that the economy is headed for a recession. However, since the US Federal Reserve be..

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  • Better late than never

    Better late than never Cover image Published 21 Jun 2019 by
    The Macro-Digest will take a two-week break, due to holiday and travel schedules, returning on 12 July. In the interim, we will keep you updated on developing stories via E-mail alerts.  Last week we highlighted three key events that would go a long way towards setting macro risk appetite fo..

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  • Crossroads

    Crossroads Cover image Published 14 Jun 2019 by
    Global markets are at a crossroads with three significant pivot points in the coming two weeks for the oil market and more broadly for general risk appetite. Next week, the US Fed meets to discuss policy and markets continue to price in higher odds of a rate cut. The week after, OPEC is scheduled..

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  • Paging the plunge protection team

    Paging the plunge protection team Cover image Published 7 Jun 2019 by
    A dramatic 20% fall in crude prices since 1 May is conjuring memories of Q4 18’s liquidity-induced risk assets crash and bringing recession fears to the surface. But this time around, while crude has been capitulating, equities have not. In fact, the divergence between crude and equities is..

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  • Pushing on a string

    Pushing on a string Cover image Published 31 May 2019 by
    Risk assets have continued to consolidate this week as traders try to weigh the whole range of risks before them this summer, perhaps still holding out hope for a positive outcome to the US–China trade negotiations. After rallying by 40% from January to April, Brent has now eased by some 13..

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  • Huawei to hell

    Huawei to hell Cover image Published 24 May 2019 by
    In a bit of a delayed reaction to last week’s China tariffs announcement, the market this week has finally started to absorb that the dispute between Washington and Beijing is about much more than just the trade imbalance between the two countries. Coupled with weakening PMIs in Japan, Euro..

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