Paul Walton
Suderman Says: Markets stabilize despite Bank stocks and interest rate uncertainty
Suderman Says that lingering uneasiness over bank solvency and this week’s Federal Reserve meeting worried traders overnight as Wall Street remains in an overall “risk-off” mode. Banking stocks largely led the way lower on fears of a broader contagion risk within the sector.
Baseline: Indonesia’s export bans reinforce local industry, limits exports
Natalie Scott-Gray highlights Indonesia's ‘grand strategy’ to support its domestic refining industries, limiting the export of unprocessed raw materials – most notably nickel – and increasing the shipment of refined products which benefit local industry.
Suderman Says: Risk-on thanks to sliding Bank stocks and interest rate uncertainty
Suderman says that equity markets fell again today, with bank shares of First Republic and Credit Suisse leading the way lower. Investor focus remains on interest rates and the outside markets, especially now with the Fed meeting next week and expectations for rate hikes scaled back.
Petroleum Post: Oil faces choppy trading ahead, long-term bullish
The oil market has been extremely volatile, tracking a volatile equity market. Crude oil was down 5% today, with WTI at $66.45. WTI prices have dropped to their lowest price since December 2021, losing over $14 per barrel in 2 weeks. A long-term bull run is still on the cards. However, current market dynamics point to continued downward pressure on prices.
Baseline: Peru announces reopening of key mining corridor, adding copper exports to world supply
Natalie Scott-Gray discusses the importance of Peru’s reopening of key mining corridor after a period of significant political volatility: the countries mines are responsible for 12% of global copper output, or 2.8 million tons in 2023; in addition, Peru produces significant lead, zinc, tin, and silver.
European rate rises and bank bailouts calm global markets
Suderman says that the European Central Bank hiked its benchmark interest rate by 50 basis points as expected this morning but gave no signals about future moves. US economic data remains resilient. Markets welcomed continued efforts to control inflation, and another bank bailout (but bigger). How the Fed responds with rate rises is a key focus.
Baseline: Russia increasingly excluded from global Aluminium markets
Natalie Scott-Gray discusses risks of Russian growing exclusion from global Aluminium markets, specifically Glencore’s decision to cut ties in 2024, and President Biden’s policy focus.
Markets at a turning point on rate expectations and the threat of endemic inflation
Arlan Suderman discusses his belief that the greater threat to our economy is for inflation to become deeply engrained, if the Fed backs off its focus on this problem, setting in motion a series of events that ends up creating long-term pain for everyone.
Baseline: Base metal price gains moderate as demand outlook sours
Natalie Scott-Gray discusses how a fundamental weakness in demand has caused a year-to-date retrenchment in the base metal index. Some explanations include souring macro demand conditions in the US, and weaker than expected economic forecasts from China after its annual ‘Two Sessions’ meetings (annual plenary sessions of the National People's Congress and of the Chinese People's Political Consultative Conference.)
Moderating rate hikes silver lining of bank failures?
Arlan Suderman notes that calm is restored on Wall Street for now, as worries about bank failure contagion ease. Banks failures brought a silver lining: diminished expectations for rate rises. However, consumer price inflation day is still a problem, just as the Fed’s freedom to raise rates might be limited. Volatility and bond yields moderated, but for how long?
Commodity prices forecast to be strong in 2023
The StoneX Metals and Energy Markets Annual Outlook forecasts double digit percentage increases for seven out of twelve commodities tracked.