energy

The good news with China's reopening is that it should boost global growth.  

The bad news with China's reopening is that it will not only boost global growth, but also energy and commodity prices - hence inflation, the interest rate hikes from central banks and potentially the global Covid cases – which could then give birth to a new, and a dangerous Covid variant, which would, in return, bring the restrictive Covid measures back on the table, and hammer growth.  

Note that the reasoning stops here right now, the risky markets are painted in the red, but we could eventually go one step further and say that if the Chinese reopening hits the global health situation – hence the economy badly, the central banks could become softer on their rate hike strategies. But no one is cheery enough to see silver lining anywhere.  

This year really needs to end, now! 

Natural Gas News - What Is The Market's Reaction To The Ongoing Russia-Ukraine Conflict?

Natural Gas News - What Is The Market's Reaction To The Ongoing Russia-Ukraine Conflict?

Alex Kuptsikevich Alex Kuptsikevich 01.04.2022 14:46
The energy sector has retreated markedly from its highs in the first days of March but remains a hot topic for markets. Europe’s gas market survived several bouts of fear that it would be without Russian gas. However, we only saw a fourfold increase in value in the first half of the month, followed by stabilisation at high, but not extreme, levels. At the beginning of the last week of March, the price was supported by a fall to EUR 1000 per thousand cubic metres compared to a peak of EUR 3400. This price dynamic clearly showed that the markets did not price for a gas disaster. The current gas payment scheme looks like a nice political compromise. Europe is paying for gas in euros and dollars (as negotiated), and Russia is getting roubles for gas (as it wanted). The net economic effect of such rearrangements is close to zero. Also, these measures are not binding for LNG exports and settlements with Japan. Besides, there is a caveat that a special commission may allow receiving currency in payment for gas. An additional calculation here is that new contracts will always include clauses about alternative payment methods, but they have little effect on the price. Nevertheless, the general upward trend in gas and oil prices is still in place. Spot gas prices in Europe are now six times higher than a year ago and two years ago in March. This does not mean a six-fold increase in prices for final consumers, as most supplies are under long-term contracts. Therefore, what we see in the Dutch TTF prices is nothing more than a struggle between speculators and small buyers in a relatively illiquid market. The NYMEX pricing is much more liquid and representative. Besides, it is pretty far from the conflict. Prices here are up 30% in one month and 130% year to date. Gas was up to $5.6 MMBtu yesterday but 14% below October’s highs near $6.5, making it hard to see market hysteria. Instead, it is just a relatively measured trend. The development of this trend has the potential to return the US gas price to October highs by the end of April due to Europe’s increased interest in non-Russian gas. At the same time, signs that Europe and Russia have managed to formalise some gas purchase terms for themselves are likely to return Dutch’s spot prices to levels near or below EUR 1000.
COT Energy Speculators pullback on #2 Heating Oil bullish bets for 3rd time in 4 weeks

COT Energy Speculators pullback on #2 Heating Oil bullish bets for 3rd time in 4 weeks

Invest Macro Invest Macro 02.04.2022 16:53
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday March 29th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Highlighting the COT energy data is the recent decline in the Heating Oil futures bets. The speculative net position in the Heating Oil futures has dropped for two consecutive weeks and in three out of the past four weeks. The spec crude position has declined by a total of -9,420 contracts over the past four weeks and speculators have now pushed their current net positioning to the lowest level in six weeks. Heating Oil speculator positions are currently (+6,455 contracts) at the lower end of their range after averaging approximately +20,000 contracts each week over the whole of 2021. Heating Oil prices, meanwhile, have seen price surges (hitting multi-year highs) in the past few months due to the Russian invasion of Ukraine but did retrace lower this week with a decline by approximately -8.00 percent for the week at Friday’s close. The energy markets that saw higher speculator bets this week were Natural Gas (11,926 contracts) and the Bloomberg Commodity Index (2,972 contracts). The energy markets that saw lower speculator bets this week were WTI Crude Oil (-21,238 contracts), Heating Oil (-9,228 contracts), Gasoline (-8,168 contracts) and Brent Crude Oil (-554 contracts). Data Snapshot of Commodity Market Traders | Columns Legend Mar-29-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,795,929 1 318,731 0 -360,162 99 41,431 73 Gold 574,521 39 257,596 70 -285,937 30 28,341 45 Silver 147,370 14 48,240 70 -61,372 39 13,132 19 Copper 203,692 29 30,581 64 -37,333 34 6,752 64 Palladium 6,720 1 -2,011 10 1,364 84 647 81 Platinum 61,807 25 14,001 22 -20,754 79 6,753 56 Natural Gas 1,100,690 4 -137,411 37 92,762 60 44,649 92 Brent 188,542 30 -25,220 69 21,609 29 3,611 58 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 755,139 34 206,469 81 -178,764 24 -27,705 24 Corn 1,515,106 24 482,092 92 -424,699 11 -57,393 10 Coffee 227,547 6 38,689 77 -42,092 27 3,403 12 Sugar 819,459 1 161,581 70 -202,758 30 41,177 59 Wheat 341,224 3 13,559 59 -9,435 32 -4,124 91   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week resulted in a net position of 318,731 contracts in the data reported through Tuesday. This was a weekly lowering of -21,238 contracts from the previous week which had a total of 339,969 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 99.4 percent and the small traders (not shown in chart) are Bullish with a score of 73.4 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.4 36.5 4.8 – Percent of Open Interest Shorts: 5.6 56.5 2.5 – Net Position: 318,731 -360,162 41,431 – Gross Longs: 420,097 654,965 85,767 – Gross Shorts: 101,366 1,015,127 44,336 – Long to Short Ratio: 4.1 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 99.4 73.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -10.8 12.7 -3.5   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week resulted in a net position of -25,220 contracts in the data reported through Tuesday. This was a weekly decline of -554 contracts from the previous week which had a total of -24,666 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.9 percent. The commercials are Bearish with a score of 29.2 percent and the small traders (not shown in chart) are Bullish with a score of 58.1 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.2 44.2 4.4 – Percent of Open Interest Shorts: 33.6 32.7 2.5 – Net Position: -25,220 21,609 3,611 – Gross Longs: 38,169 83,276 8,330 – Gross Shorts: 63,389 61,667 4,719 – Long to Short Ratio: 0.6 to 1 1.4 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.9 29.2 58.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.9 -1.1 -5.9   Natural Gas Futures: The Natural Gas Futures large speculator standing this week resulted in a net position of -137,411 contracts in the data reported through Tuesday. This was a weekly gain of 11,926 contracts from the previous week which had a total of -149,337 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 37.3 percent. The commercials are Bullish with a score of 60.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 92.0 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 22.6 42.7 6.2 – Percent of Open Interest Shorts: 35.1 34.3 2.2 – Net Position: -137,411 92,762 44,649 – Gross Longs: 249,135 470,232 68,418 – Gross Shorts: 386,546 377,470 23,769 – Long to Short Ratio: 0.6 to 1 1.2 to 1 2.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 37.3 60.1 92.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.8 -2.3 33.2   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week resulted in a net position of 40,202 contracts in the data reported through Tuesday. This was a weekly decline of -8,168 contracts from the previous week which had a total of 48,370 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 11.0 percent. The commercials are Bullish-Extreme with a score of 89.2 percent and the small traders (not shown in chart) are Bullish with a score of 56.8 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.1 53.0 7.6 – Percent of Open Interest Shorts: 12.0 69.7 4.9 – Net Position: 40,202 -47,775 7,573 – Gross Longs: 74,554 151,056 21,630 – Gross Shorts: 34,352 198,831 14,057 – Long to Short Ratio: 2.2 to 1 0.8 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 11.0 89.2 56.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -22.8 25.0 -15.4   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week resulted in a net position of 6,455 contracts in the data reported through Tuesday. This was a weekly fall of -9,228 contracts from the previous week which had a total of 15,683 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bearish with a score of 36.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.0 50.8 14.4 – Percent of Open Interest Shorts: 15.1 60.1 6.9 – Net Position: 6,455 -32,434 25,979 – Gross Longs: 59,340 177,626 50,210 – Gross Shorts: 52,885 210,060 24,231 – Long to Short Ratio: 1.1 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 51.9 36.7 88.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.2 -10.3 23.6   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week resulted in a net position of -9,348 contracts in the data reported through Tuesday. This was a weekly gain of 2,972 contracts from the previous week which had a total of -12,320 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 71.7 percent. The commercials are Bearish with a score of 25.7 percent and the small traders (not shown in chart) are Bullish with a score of 52.6 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 70.8 23.8 2.9 – Percent of Open Interest Shorts: 97.2 0.0 0.3 – Net Position: -9,348 8,415 933 – Gross Longs: 25,002 8,415 1,022 – Gross Shorts: 34,350 0 89 – Long to Short Ratio: 0.7 to 1 inf to 1 11.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 71.7 25.7 52.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 29.4 -30.9 11.7   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Chart of the Week - Gold Miners vs Energy Producers - 20.04.2022

Chart of the Week - Gold Miners vs Energy Producers

Callum Thomas Callum Thomas 20.04.2022 22:05
Gold Miners Left Behind: This curious chart shows the total assets under management in US equity sector ETFs focused on energy (i.e. traditional energy: oil/gas/coal) and gold miners. AUM in energy ETFs has gone up more than 5x since the low point: part of this is clearly price-driven as surging energy prices have triggered better stock price performance and improved financial results. But clearly investors have also had a change of heart on the sector after shunning it for some time (particularly with the rise of ESG investing). To be fair, precious metal prices have been a big fat range trade for most of the past 2 years The standout though in this chart is the one that isn’t standing out: gold mining ETF AUM has by contrast been very sleepy. To be fair, precious metal prices have been a big fat range trade for most of the past 2 years, and at the end of the day when it comes to these commodity equity sectors, commodity prices matter.With gold itself on the cusp of a breakout, this chart begins to look very interesting, and we could easily see a stampede into gold miners if gold itself can manage to break through to new highs. Indeed, with the bull market in equities seemingly in its final throes this could end up appealing to the hoard of retail speculators still searching for their golden ticket…         Key point: Gold miners have been left behind. NOTE: this post first appeared on our NEW Substack: https://topdowncharts.substack.com/Best regards, Callum Thomas Head of Research and Founder of Topdown Charts Follow us on: LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
COT Soft Commodities Speculators raising bullish bets for Soybean Oil as prices hit record high

COT Soft Commodities Speculators raising bullish bets for Soybean Oil as prices hit record high

Invest Macro Invest Macro 23.04.2022 19:33
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday April 19th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Highlighting the COT soft commodities data is the recent rises in Soybean Oil futures bets. The speculative net position in the Soybean Oil futures has gained for three straight weeks and has increased in eight out of the past ten weeks. Soybean Oil speculator positions have added a total of +39,176 contracts over the past ten weeks as well. This ascent in bullish bets has brought the current overall position to over +100,000 net contracts and to the highest level of the past fifty-six weeks, dating back to March 23rd of 2021. Soybean Oil prices raced to a record high level at over $80 per pound this week and surpassed the previous price peaks of 2008 and 2021. The Soybean Oil prices have had a strong fundamental component driving it higher. The war in Ukraine has created a major disruption in Sunflower Oils (Ukraine and Russia are major suppliers) that has pushed the prices in alternative oils and other soft commodities sharply higher. Reuters news service also cited an Indonesia ban on exports of Palm Oil as having caused an even greater demand for alternative vegetable oils. The dreary outlook for vegetable oil production could mean we see even higher Soybean Oil prices. Overall, the soft commodities that saw higher bets this week were Corn (5,031 contracts), Soybeans (1,803 contracts), Soybean Oil (6,887 contracts), Soybean Meal (6,498 contracts), Live Cattle (2,683 contracts), Lean Hogs (2,231 contracts) and Cotton (1,900 contracts). The soft commodities that saw lower bets this week were Sugar (-349 contracts), Coffee (-6,126 contracts), Cocoa (-2,802 contracts) and Wheat (-641 contracts). Data Snapshot of Commodity Market Traders | Columns Legend Apr-19-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,740,300 0 307,697 1 -351,252 100 43,555 76 Gold 575,202 40 239,757 60 -275,525 37 35,768 66 Silver 170,577 35 46,429 69 -63,288 37 16,859 41 Copper 203,896 29 18,840 56 -28,307 40 9,467 80 Palladium 6,435 0 -2,182 9 1,560 85 622 80 Platinum 61,603 24 7,537 13 -13,812 89 6,275 50 Natural Gas 1,144,047 14 -130,006 40 82,113 57 47,893 100 Brent 191,883 33 -40,102 44 37,663 56 2,439 42 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 762,855 36 200,098 80 -174,873 25 -25,225 28 Corn 1,625,198 42 500,612 94 -456,269 7 -44,343 18 Coffee 209,410 0 41,803 79 -45,447 24 3,644 15 Sugar 909,622 21 239,515 86 -295,470 12 55,955 77 Wheat 337,038 1 23,245 67 -20,425 21 -2,820 98   CORN Futures: The CORN large speculator standing this week equaled a net position of 500,612 contracts in the data reported through Tuesday. This was a weekly lift of 5,031 contracts from the previous week which had a total of 495,581 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 94.0 percent. The commercials are Bearish-Extreme with a score of 6.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.5 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.1 45.0 9.4 – Percent of Open Interest Shorts: 5.3 73.1 12.1 – Net Position: 500,612 -456,269 -44,343 – Gross Longs: 586,638 731,004 152,407 – Gross Shorts: 86,026 1,187,273 196,750 – Long to Short Ratio: 6.8 to 1 0.6 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 94.0 6.9 17.5 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.3 0.1 -1.7   SUGAR Futures: The SUGAR large speculator standing this week equaled a net position of 239,515 contracts in the data reported through Tuesday. This was a weekly decrease of -349 contracts from the previous week which had a total of 239,864 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 85.8 percent. The commercials are Bearish-Extreme with a score of 12.1 percent and the small traders (not shown in chart) are Bullish with a score of 77.0 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.6 44.2 11.6 – Percent of Open Interest Shorts: 6.3 76.7 5.5 – Net Position: 239,515 -295,470 55,955 – Gross Longs: 296,437 402,400 105,565 – Gross Shorts: 56,922 697,870 49,610 – Long to Short Ratio: 5.2 to 1 0.6 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 85.8 12.1 77.0 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 18.2 -19.8 20.0   COFFEE Futures: The COFFEE large speculator standing this week equaled a net position of 41,803 contracts in the data reported through Tuesday. This was a weekly fall of -6,126 contracts from the previous week which had a total of 47,929 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 78.5 percent. The commercials are Bearish with a score of 24.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.4 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.5 53.8 4.7 – Percent of Open Interest Shorts: 5.5 75.5 2.9 – Net Position: 41,803 -45,447 3,644 – Gross Longs: 53,423 112,616 9,760 – Gross Shorts: 11,620 158,063 6,116 – Long to Short Ratio: 4.6 to 1 0.7 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 78.5 24.5 15.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.6 8.4 -2.5   SOYBEANS Futures: The SOYBEANS large speculator standing this week equaled a net position of 200,098 contracts in the data reported through Tuesday. This was a weekly boost of 1,803 contracts from the previous week which had a total of 198,295 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.8 percent. The commercials are Bearish with a score of 24.7 percent and the small traders (not shown in chart) are Bearish with a score of 28.4 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.8 46.0 7.2 – Percent of Open Interest Shorts: 6.6 69.0 10.5 – Net Position: 200,098 -174,873 -25,225 – Gross Longs: 250,566 351,286 55,231 – Gross Shorts: 50,468 526,159 80,456 – Long to Short Ratio: 5.0 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.8 24.7 28.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.1 3.4 3.6   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week equaled a net position of 105,211 contracts in the data reported through Tuesday. This was a weekly lift of 6,887 contracts from the previous week which had a total of 98,324 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 80.6 percent. The commercials are Bearish-Extreme with a score of 16.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.2 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.5 44.2 10.5 – Percent of Open Interest Shorts: 4.8 76.5 4.9 – Net Position: 105,211 -127,399 22,188 – Gross Longs: 124,302 174,162 41,383 – Gross Shorts: 19,091 301,561 19,195 – Long to Short Ratio: 6.5 to 1 0.6 to 1 2.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 80.6 16.1 96.2 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.3 -9.5 20.0   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week equaled a net position of 122,756 contracts in the data reported through Tuesday. This was a weekly boost of 6,498 contracts from the previous week which had a total of 116,258 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 95.8 percent. The commercials are Bearish-Extreme with a score of 2.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 99.0 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.5 42.4 13.1 – Percent of Open Interest Shorts: 3.1 80.7 5.2 – Net Position: 122,756 -154,801 32,045 – Gross Longs: 135,397 171,107 52,874 – Gross Shorts: 12,641 325,908 20,829 – Long to Short Ratio: 10.7 to 1 0.5 to 1 2.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 95.8 2.4 99.0 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.6 -2.2 13.0   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week equaled a net position of 54,525 contracts in the data reported through Tuesday. This was a weekly lift of 2,683 contracts from the previous week which had a total of 51,842 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.5 percent. The commercials are Bullish with a score of 67.0 percent and the small traders (not shown in chart) are Bullish with a score of 56.0 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 37.6 39.8 10.1 – Percent of Open Interest Shorts: 19.8 54.8 12.9 – Net Position: 54,525 -45,886 -8,639 – Gross Longs: 115,285 122,065 30,955 – Gross Shorts: 60,760 167,951 39,594 – Long to Short Ratio: 1.9 to 1 0.7 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 29.5 67.0 56.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 11.6 -12.0 -5.7   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week equaled a net position of 43,002 contracts in the data reported through Tuesday. This was a weekly increase of 2,231 contracts from the previous week which had a total of 40,771 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.6 percent. The commercials are Bearish with a score of 48.2 percent and the small traders (not shown in chart) are Bullish with a score of 69.8 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.4 34.4 10.7 – Percent of Open Interest Shorts: 17.6 51.1 12.7 – Net Position: 43,002 -38,275 -4,727 – Gross Longs: 83,133 78,601 24,424 – Gross Shorts: 40,131 116,876 29,151 – Long to Short Ratio: 2.1 to 1 0.7 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 53.6 48.2 69.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.3 6.1 16.7   COTTON Futures: The COTTON large speculator standing this week equaled a net position of 85,120 contracts in the data reported through Tuesday. This was a weekly gain of 1,900 contracts from the previous week which had a total of 83,220 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.9 percent. The commercials are Bearish with a score of 20.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 94.6 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 46.6 35.0 9.4 – Percent of Open Interest Shorts: 6.0 81.8 3.1 – Net Position: 85,120 -98,107 12,987 – Gross Longs: 97,613 73,296 19,582 – Gross Shorts: 12,493 171,403 6,595 – Long to Short Ratio: 7.8 to 1 0.4 to 1 3.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 76.9 20.6 94.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.1 -1.0 20.9   COCOA Futures: The COCOA large speculator standing this week equaled a net position of 36,357 contracts in the data reported through Tuesday. This was a weekly reduction of -2,802 contracts from the previous week which had a total of 39,159 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.3 percent. The commercials are Bearish with a score of 44.0 percent and the small traders (not shown in chart) are Bullish with a score of 65.1 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.5 45.6 6.3 – Percent of Open Interest Shorts: 16.4 63.5 3.5 – Net Position: 36,357 -43,099 6,742 – Gross Longs: 75,822 109,538 15,230 – Gross Shorts: 39,465 152,637 8,488 – Long to Short Ratio: 1.9 to 1 0.7 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 53.3 44.0 65.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 6.5 -2.9 -34.9   WHEAT Futures: The WHEAT large speculator standing this week equaled a net position of 23,245 contracts in the data reported through Tuesday. This was a weekly fall of -641 contracts from the previous week which had a total of 23,886 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.8 percent. The commercials are Bearish with a score of 21.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 98.1 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.0 37.6 9.5 – Percent of Open Interest Shorts: 29.1 43.7 10.4 – Net Position: 23,245 -20,425 -2,820 – Gross Longs: 121,339 126,766 32,116 – Gross Shorts: 98,094 147,191 34,936 – Long to Short Ratio: 1.2 to 1 0.9 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 66.8 21.0 98.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.0 -14.5 22.9   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

COT Futures: This Week’s Energy Charts

Invest Macro Invest Macro 15.05.2022 14:57
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 10th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The energy markets with higher speculator bets this week were Natural Gas (5,177 contracts) and the Bloomberg Commodity Index (91 contracts). The markets with declining speculator bets this week were WTI Crude Oil (-10,898 contracts), Brent Crude Oil (-3,897 contracts), Heating Oil (-9,228 contracts) and Gasoline (-7,003 contracts). Data Snapshot of Commodity Market Traders | Columns Legend May-10-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index WTI Crude 1,736,594 0 310,803 2 -354,479 98 43,676 77 Gold 571,447 34 193,315 40 -227,756 57 34,441 57 Silver 142,752 9 19,082 41 -30,519 69 11,437 9 Copper 184,502 15 -22,626 26 19,249 73 3,377 45 Palladium 8,832 11 -3,245 3 3,434 96 -189 33 Platinum 66,064 32 1,363 5 -5,373 98 4,010 18 Natural Gas 1,108,451 6 -112,529 45 64,006 51 48,523 100 Brent 173,911 19 -31,215 59 30,562 44 653 18 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 694,454 20 174,608 72 -147,698 33 -26,910 26 Corn 1,510,783 23 470,908 90 -415,345 13 -55,563 11 Coffee 212,659 5 32,555 69 -33,559 37 1,004 0 Sugar 797,453 0 187,185 75 -220,611 26 33,426 49 Wheat 308,326 0 21,686 48 -17,779 34 -3,907 92   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week equaled a net position of 310,803 contracts in the data reported through Tuesday. This was a weekly fall of -10,898 contracts from the previous week which had a total of 321,701 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.1 percent. The commercials are Bullish-Extreme with a score of 98.5 percent and the small traders (not shown in chart) are Bullish with a score of 76.6 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.9 35.4 5.2 – Percent of Open Interest Shorts: 6.0 55.8 2.7 – Net Position: 310,803 -354,479 43,676 – Gross Longs: 415,170 614,716 90,689 – Gross Shorts: 104,367 969,195 47,013 – Long to Short Ratio: 4.0 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 2.1 98.5 76.6 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -2.8 2.2 3.2   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week equaled a net position of -31,215 contracts in the data reported through Tuesday. This was a weekly fall of -3,897 contracts from the previous week which had a total of -27,318 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.8 percent. The commercials are Bearish with a score of 44.1 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.0 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 19.2 48.1 5.0 – Percent of Open Interest Shorts: 37.2 30.5 4.6 – Net Position: -31,215 30,562 653 – Gross Longs: 33,423 83,639 8,698 – Gross Shorts: 64,638 53,077 8,045 – Long to Short Ratio: 0.5 to 1 1.6 to 1 1.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 58.8 44.1 18.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -10.1 14.9 -40.0   Natural Gas Futures: The Natural Gas Futures large speculator standing this week equaled a net position of -112,529 contracts in the data reported through Tuesday. This was a weekly boost of 5,177 contracts from the previous week which had a total of -117,706 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.8 percent. The commercials are Bullish with a score of 51.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 21.1 37.9 6.6 – Percent of Open Interest Shorts: 31.3 32.2 2.2 – Net Position: -112,529 64,006 48,523 – Gross Longs: 234,306 420,582 73,144 – Gross Shorts: 346,835 356,576 24,621 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 44.8 51.0 100.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 7.5 -9.1 9.6   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week equaled a net position of 31,378 contracts in the data reported through Tuesday. This was a weekly decline of -7,003 contracts from the previous week which had a total of 38,381 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.1 percent. The commercials are Bullish-Extreme with a score of 93.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 97.3 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.6 50.9 8.3 – Percent of Open Interest Shorts: 14.2 65.6 4.0 – Net Position: 31,378 -44,072 12,694 – Gross Longs: 73,929 152,809 24,799 – Gross Shorts: 42,551 196,881 12,105 – Long to Short Ratio: 1.7 to 1 0.8 to 1 2.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 2.1 93.0 97.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -9.0 3.7 34.1   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week equaled a net position of 6,455 contracts in the data reported through Tuesday. This was a weekly lowering of -9,228 contracts from the previous week which had a total of 15,683 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bearish with a score of 36.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.0 50.8 14.4 – Percent of Open Interest Shorts: 15.1 60.1 6.9 – Net Position: 6,455 -32,434 25,979 – Gross Longs: 59,340 177,626 50,210 – Gross Shorts: 52,885 210,060 24,231 – Long to Short Ratio: 1.1 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 51.9 36.7 88.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 4.2 -10.3 23.6   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week equaled a net position of -13,263 contracts in the data reported through Tuesday. This was a weekly lift of 91 contracts from the previous week which had a total of -13,354 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.8 percent. The commercials are Bearish with a score of 41.9 percent and the small traders (not shown in chart) are Bearish with a score of 41.5 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 57.7 36.7 2.0 – Percent of Open Interest Shorts: 96.2 0.0 0.2 – Net Position: -13,263 12,644 619 – Gross Longs: 19,888 12,644 703 – Gross Shorts: 33,151 0 84 – Long to Short Ratio: 0.6 to 1 inf to 1 8.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 56.8 41.9 41.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -15.0 16.3 -11.1   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

The Commodities Feed: Another week passes with no EU ban | ING Economics

ING Economics ING Economics 20.05.2022 08:36
Your daily roundup of commodities news and ING views Tank farm for storage of petroleum products in Volgograd, Russia Energy It appears that another week will pass with the EU still unable to agree on a Russian oil ban. While it is taking longer than expected to come to an agreement, we believe that member states will eventually come to a deal. How much of an impact this will have on the market will depend on how watered down the final agreement is relative to the proposal. The effectiveness of the ban will also depend on the actions of countries outside the EU. Bloomberg reports that China is looking to potentially buy Russian crude for its strategic reserves. Although this shouldn’t come as too much of a surprise if China is set to increase its share of Russian oil purchases. The significant discounts available for Russian crude will prove very tempting for some buyers, like China and India. Self-sanctioning will already be affecting Russian oil flows to the EU, even in the absence of an official oil ban. This has left the EU to look elsewhere for alternative supplies, and whilst the US is an obvious candidate (given the expectation of relatively strong supply growth), we could in fact see US crude exports coming under pressure given the narrowing that we have seen in the WTI/Brent discount. The July WTI/Brent discount narrowed to less than US$2/bbl at one stage this week, after starting the month at more than a US$4/bbl discount. Inventories continue to point towards a tightening of the refined products market in Europe. The latest data from Insights Global show that gasoil inventories in the ARA region fell by 31kt over the week to 1.55kt, leaving inventories at multi-year lows. However, the big move over the week was in European gasoline inventories. Gasoline stocks in ARA fell by 342kt to 1.05mt. This decline over the week has seen gasoline inventories fall from more than a 5-year high to just below the 5-year average. Singapore also saw a further tightening in light distillate stocks over the week, with inventory levels declining by 815Mbbls to 13.74MMbbls, leaving them hovering just above the 5-year average. Clearly, the tightness that we are seeing in the US gasoline market is spreading into other regions. And given that the driving season is still ahead of us, we would expect to see further declines in inventories, which should prove supportive for gasoline prices over the summer. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM European gas prices came under pressure yesterday. TTF fell by more than 3.7%, which saw the market settling at its lowest levels since the start of the war. European gas storage continues to improve due to strong LNG inflows. Storage in Europe is almost 41% full at the moment compared to a 5-year average of around 44% for this stage of the year. The gap between current inventories and the 5-year average continues to narrow. Assuming we go through injection season with no significant disruption to Russian gas flows, Europe should enter the next heating season with a comfortable inventory. However, this is a big assumption, and the risk of disruption is likely to continue to keep the market trading at historically high levels. US natural gas prices also came under pressure yesterday, selling off almost 2.7%. Weekly storage data shows that US gas storage increased by 89Bcf over the week, which was slightly higher than the 5-year average of 87Bcf. Agriculture The latest data from the Indian Sugar Mills Association shows that sugar production in India has increased to around 34.9mt so far this season. The association reported that around 116 sugar mills were still operating as of 15 May. ISMA maintained its export estimate at around 9mt for the current year, with around 8.5mt of export sales already made. The food ministry reported that sugar exports have increased to around 7.5mt as of 18th May, already surpassing last year’s 7.2mt of exports. The ministry estimates that around 3.5mt of sugar equivalent would be diverted to ethanol this year and expects this to grow with targets of around 6mt by 2025. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsSugar Russian oil ban Natural gas Gasoline shortage Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News
Energy transition has many faces. The biggest floating wind farm in the world produced its first power output. OpenAI generates images

Green Energy Stocks To Dominate Markets In The Near Future? | America's growing bioenergy market needs clearer monitoring and more innovation | ING Economics

ING Economics ING Economics 20.05.2022 00:00
Bioenergy is a crucial pathway to net-zero emissions by 2050. The bioenergy market in the US has been growing and diversifying, with strong growth potential seen in carbon capture and storage (CCS), renewable diesel, and renewable natural gas. Addressing the environmental impact of bioenergy needs clear monitoring and more innovative solutions Bioenergy is a form of renewable energy derived from organic material   Bioenergy, a form of renewable energy derived from organic materials (or biomass), will play a pivotal role in helping the world achieve net-zero emissions by 2050. With a wide range of application options in sectors such as transport, heating, and electricity, bioenergy is forecast to account for 19% of total energy supply in 2050 and will contribute to 13% of the emissions reduction between 2020 and 2030 under the International Energy Agency's (IEA) Net-Zero Emissions (NZE) scenario. Emissions reductions by mitigation measure in the Net-Zero Emissions scenario, 2020-50 Source: International Energy Agency   In the US, the development of bioenergy has been accelerating and expanding. In the transport sector, the US is home to the world’s largest biofuels market, and the demand for biofuels in North America is expected to grow more than any other region through 2026 under the IEA’s baseline scenario. Growth will continue to be led by a diversification of biofuels supply beyond conventional ethanol, as advanced biofuels like renewable diesel and renewable natural gas (RNG) keep gaining momentum. Sustainable aviation fuels (SAFs) are another point of growth; these will be covered in a later article. Biofuel demand growth by region in the baseline scenario, 2021-2026 Source: International Energy Agency   But the deployment of and investment in bioenergy is rising in other sectors as well, led by mounting action from corporates and investors across sectors to decarbonise their businesses and portfolios. So, let's take a look at the growth prospects of various bioenergy applications in the US, as well as the challenges they face.   Examples of bioenergy-related corporate climate strategies: Oil and gas: ExxonMobil identifies biofuels as one of its core solutions for its net-zero ambition. The company announced in early 2022 that it would acquire a 49.9% stake in Biojet AS, a Norwegian biofuels company, to receive up to three million barrels of biofuels per year. ExxonMobil is also investing $125m in California-based Global Clean Energy to purchase up to five million barrels per year of renewable diesel. Petrochemicals: Dow sees the creation of a circular economy through recycling and using bio-based materials as a focus area to accelerate sustainability. The company is expanding an agreement with Fuenix Ecogy Group to ramp up circular plastics production. It has also signed agreements with Gunvor Petroleum Rotterdam and Texas-based New Hope Energy to purify pyrolysis oil feedstocks derived from plastic waste. Power: Southern Company last year took ownership of the Meadow Branch Landfill Methane Recovery Facility, the renewable natural gas facility located in Tennessee, to strengthen its RNG capacity as part of the company’s strategy to achieve net-zero emissions by 2050. Biofuels: Federal policies will have a net positive effect on US production this year The main federal policy to support the US biofuels market is the renewable fuel standard (RFS), which requires refiners to blend certain volumes of biofuels in gasoline each year. The RFS benefited biofuels production – especially that of fuel ethanol – in the past, although in recent years the RFS has become more susceptible to policy uncertainty. The Environmental Protection Agency (EPA), which is in charge of setting RFS mandates, last December proposed to retroactively lower biofuel mandates for 2020 and 2021 but set 2022 requirements slightly above pre-pandemic levels. This will put pressure on refiners to blend more biofuel into their gasoline production this year, resulting in a net positive impact on the biofuels industry. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM In addition, the EPA has proposed the rejection of all outstanding small refinery exemption (SREs) waivers pending for the 2016-20 compliance years. SREs give small refiners that process less than 75,000 barrels per day (bpd) of oil and can demonstrate economic hardship caused by the RFS an exemption from complying with the rules. If implemented, this decision would substantially raise the demand for biofuel credits. A federal policy that will specifically boost the production of ethanol is the Biden administration's plan to allow E15 gasoline, a fuel that uses a 15% ethanol blend, to be sold between June and September. E15 gasoline is typically banned in summer due to worries about air pollution. E15 consumption is low also because of retail availability, automobile compatibility, and safety concerns. But heightened oil prices amid the Russia-Ukraine war have made the case for more E15 gasoline sales to ease prices. State level policies are a powerful addition At the state level, California’s low-carbon fuel standard (LCFS), the backbone of a carbon intensity-based cap-and-trade system, has been playing a substantial role in incentivising biofuels production in and near the state. The LCFS aims to achieve a 20% reduction in the carbon intensity of California’s transportation fuel pool by 2030, with compliance standards set for each year. Carbon intensity (CIs) based on composite of gasoline and diesel fuels under the LCFS Source: California Air Resources Board   Since last year, LCFS credits (supply) generated from low-carbon fuels have increasingly outgrown LCFS deficits (demand), which has led to a 23% fall from the record high LCFS price of $206/metric ton to $158/metric ton in March 2022. This is mainly because the demand for gasoline and LCFS credits has not recovered from the pandemic, whereas the production of low-carbon fuels keeps growing steadily. The biggest driver of recent LCFS credit generation is renewable diesel, followed by electricity, which has been boosted by the continuing adoption of electric vehicles. LCFS total credits and deficits for all fuels reported Note: Cumulative bank refers to total number of banked credits Source: California Air Resources Board LCFS credit generation by fuel type *Hydrogen, Renewable Naphtha, Propane, Innovative Crude & Low Complexity/Low Energy Use Refining, etc.. Note: Project based credits are issued post verification and may not be included. Source: California Air Resources Board   It remains to be seen whether this deficit trend will be temporary or permanent; we also don't know how the expected implementation of similar programmes in adjacent jurisdictions will alter the LCFS system in California. In addition to the Clean Fuels Program in Oregon which is already in place, Washington State is expecting to implement its Clean Fuel Standard in 2023 and a federal fuel standard is set to come into force in Canada in the same year.  Other US states including New Mexico, Colorado, Minnesota, and states in the Northeast and Midwest are also in various stages of developing LCFS-style systems. These programmes will provide effective additions to the federal RFS programme in driving biofuels demand. Renewable diesel takes the lead in advanced biofuel deployment The production of biomass-based diesel – namely biodiesel and renewable diesel – has taken off in the US and is set to increase further. Of the two, biodiesel dominates the bio-based diesel market, but renewable diesel is seeing faster growth. This is partly because renewable diesel is compatible with existing distribution infrastructure and engines. With the same composition as fossil diesel, renewable diesel does not have a blending limit, whereas biodiesel typically accounts for up to 20% of fossil diesel in the US, because of insufficient regulatory incentives despite higher blends being available. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Renewable diesel’s ability to lower carbon intensity, particularly in trucking and aviation, has prompted several US refineries to invest in greenfield projects and/or convert traditional plants to process renewable diesel. Refineries set to complete conversion between 2022-23 include Marathon Petroleum’s Martinez refinery in California, CVR Energy’s Wynnewood refinery in Oklahoma, and HollyFrontier’s Cheyenne plant in Wyoming, etc. Planned renewable diesel capacity in the US is expected to reach 6bn gallons by 2025, up from less than 2.4bn gallons estimated for 2021. One major challenge to the growth of both biodiesel and renewable diesel is feedstock availability and costs. It is estimated by Bloomberg New Energy Finance (BNEF) that the demand for bio-based diesel feedstock will more than double from 2020 to 38.3bn pounds (17.4bn kilograms) in 2022, and soar to over 64bn pounds (19bn kilograms) in 2024. Prices for bio-based diesel feedstock have also climbed since 2020, causing some companies to postpone their renewable diesel projects. US estimated bio-based diesel feedstock use and implied future demand from capacity additions Source: Bloomberg New Energy Finance   In the long term, despite the growth momentum for bio-based diesel, the Energy Information Administration forecasts that bio-based diesel will remain a small part of the diesel market, accounting for less than 8% of US diesel production in 2050. This is partially due to competition from food consumption and electric vehicles (EVs), which will be discussed in a later section. Nevertheless, that 8% still translates into roughly 0.23mn bpd of production, a considerable absolute amount. RNG to see demand build up in the power sector Another promising advanced biofuel which is set for growth is renewable natural gas (RNG), or biogas that has been upgraded to replace fossil gas. RNG production capacity in the US increased at a compound annual rate of 35% between 2017 and 2021, thanks to $1.7bn of investment from oil and gas companies. Looking forward, RNG demand is projected to jump from 0.2 trillion cubic feet (Tcf) today to between 2.3 and 3.2 Tcf in 2040, according to BNEF. The fuel is forecast to be capable of displacing 6-12% of the US natural gas demand. RNG can be produced from various sources. Landfill has the strongest supply and cost advantage – most landfill RNG projects can be economical at $10/MMBtu or lower; landfill accounts for more than 60% of the RNG credits generated under the RFS and more than 90% of the RNG credits under the LCFS. In contrast, RNG produced from manure is more costly – at $30/MMBtu or higher – but remains attractive under the LCFS as it offers one of the lowest carbon intensities of less than -300 gCO2e/MJ. Importantly, although RNG demand from transportation dominates now, the majority of demand for RNG by 2040 will come from the power sector. In California, where the LCFS is advanced, RNG already contributes to 98% of natural gas used for transportation, mostly in municipal buses and trucking. The can add risks to future project returns if the produced RNG cannot be contracted in time. There is a potential in the long term for more RNG to be used in shipping, though it will encounter competition from other biofuels or synthetic fuels. RNG producers are starting to pivot their focus away from the transport sector. Archaea Energy is aiming to sell its RNG to natural gas utilities through long-term offtake agreements. The company plans to allocate 65% of its RNG production to non-transport applications. Admittedly, electricity generation from RNG today is more expensive than from conventional gas and the contribution of RNG to the grid is limited. Yet demand is likely to be sustained in the future, driven by climate commitments from commercial/residential customers and precuring requirements set for utilities. California now mandates utility company SoCalGas to increase RNG’s share of gas deliveries from 4% in 2021 to 12.5% by 2030. ­Oregon passed legislation to allow RNG to account for 30% of a utility’s purchases by 2045; the state is also letting utilities recover prudently incurred costs to meet the target. A handful of other states are considering similar policies. Outlook for US renewable natural gas demand Source: Bloomberg New Energy Finance   The favourable outlook for RNG/biogas can also augment the production of bio-fertilisers, which can be generated from the waste from biogas production. This will help meet the rising demand for bio-fertilisers in the US, spurred by growing preferences for organic food, as well as concerns over the likely harmful effects of chemical fertilisers on both health and the environment. US to pioneer in BECCS development The US is poised to lead the deployment of bioenergy with carbon capture and storage (BECCS) technology, a high-potential application of bioenergy. BECCS involves converting biomass to heat, electricity, or liquid fuels while capturing and storing the CO2 that is emitted during the conversion process. Since the growing of plant biomass absorbs CO2, BECCS can achieve net negative emissions when the emitted CO2 from bioenergy generation is permanently stored. Indeed, the UN's Intergovernmental Panel on Climate Change highlighted in its most recent report the need for carbon removal technologies for the world to reach net-zero emissions. The US is already a front-runner in CCS – it is home to 36 of the 71 new CCS projects added worldwide during the first nine months of 2021. On top of this, several BECCS networks are emerging in the Midwest thanks to lower costs of bioethanol production. Summit Carbon Solutions, for instance, is progressing with a project to link more than 30 ethanol biorefineries across Iowa, Minnesota, Nebraska, North Dakota, and South Dakota. With a total potential capturing capacity of 8 Mtpa, the network would be the largest of its kind globally. Valero Energy and BlackRock are partnering with Navigator Energy Services to develop an industrial-scale CCS network that would connect biorefineries and other industrial plants across five Midwest states. The challenges facing bioenergy The use of bioenergy is not without controversy. The main challenge is the negative impact of bioenergy generation from excessive land use. From an environmental point of view, growing feedstocks such as soybeans and corn can lead to more deforestation, degradation of soil, and harmful changes to ecosystems. From a social point of view, despite yield growth potentials, the more feedstock is used for biofuels, the less there will be for food production. This has been exacerbated by the Russia-Ukraine war, which has disrupted the global food supply chain as both countries are major exporters of several leading crops. Hence, concerns have arisen in the US that the increasing use of crops for biofuels will limit food supply and add pressure to food prices. To tackle the problem in the long term, there needs to be a switch away from conventional, food-based biofuel feedstocks to advanced biofuels which use non-food crops, municipal solid waste, and agricultural and forest residues. The IEA forests that 60% of the global bioenergy supply in 2050 will need to come from sources that do not need dedicated land use to achieve net-zero emissions. Accelerating advanced biofuel production requires stronger incentives compared to those for conventional biofuels. In the US, the federal Biomass Crop Assistance Program provides financial assistance to producers of advanced biofuel feedstock. The Biden administration has also included in its FY23 budget $245m to accelerate the R&D of next-generation biofuel technologies. Another challenge is that the traditional use of bioenergy (burning wood or traditional charcoal) remains controversial as it can cause more emissions and deforestation. The EU still categorises bioenergy as green in its Taxonomy, but has strengthened the criteria to exclude certain forms of wooden biomass from qualifying as “renewable”. In the US, the EPA sees bioenergy as a cleaner fuel, while also recognising its negative potential if not managed well. Moreover, bioenergy-based solutions face scepticism that the supply chain – which involves biomass growing, transportation, storage, and processing – can emit more CO2 and harm the environment. That is why more precise monitoring and reporting of life-cycle emissions along a bioenergy technology’s supply chain needs to be in place. Finally, competing low-carbon technologies can complicate the growth of bioenergy. In the transport sector, the massive adoption of EVs will be a major threat to the demand for biofuels. As mentioned above, RNG developers are expanding their business footprint to the power sector, though these developers will likely encounter competition from renewable energy. Nonetheless, biofuels are still likely to maintain their niche in transportation, especially in heavy-duty trucks and aeroplanes, as it will be challenging for EVs to provide long-haul services without a step-change in technology. Global bioenergy supply in the Net-Zero by 2050 Scenario, 2010-50 Source: International Energy Agency Read this article on THINK TagsUnited States Renewables Net zero Energy Transition Biofuels Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News
Commodities: Favorable weather conditions may be gone some time soon, so energy prices may go further up

COT Charts: Speculator positions were mixed in Energy this week

Invest Macro Invest Macro 22.05.2022 12:21
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 17th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning this week. Overall, the energy markets with higher speculator bets this week were WTI Crude Oil (14,834 contracts), Gasoline (2,420 contracts) and the Bloomberg Commodity Index (3,624 contracts). The markets with declining speculator bets this week were Brent Crude Oil (-3,652 contracts), Natural Gas (-2,483 contracts) and Heating Oil (-9,228 contracts). Data Snapshot of Commodity Market Traders | Columns Legend May-17-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index WTI Crude 1,730,665 0 325,637 7 -363,869 95 38,232 69 Gold 555,756 30 175,360 33 -206,879 65 31,519 48 Silver 144,534 11 16,114 38 -24,841 75 8,727 0 Copper 189,483 19 -24,408 25 23,059 75 1,349 33 Palladium 9,114 13 -3,215 3 3,621 97 -406 20 Platinum 65,926 32 2,203 7 -6,697 96 4,494 25 Natural Gas 1,118,417 8 -115,012 44 64,340 51 50,672 100 Brent 176,861 21 -34,867 53 32,127 47 2,740 46 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 709,144 24 183,647 73 -156,937 33 -26,710 26 Corn 1,548,438 29 473,743 91 -424,756 11 -48,987 15 Coffee 206,106 0 38,487 72 -40,949 32 2,462 13 Sugar 825,281 6 196,630 77 -245,374 22 48,744 68 Wheat 326,651 8 28,806 57 -26,020 23 -2,786 98   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week totaled a net position of 325,637 contracts in the data reported through Tuesday. This was a weekly advance of 14,834 contracts from the previous week which had a total of 310,803 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.3 percent. The commercials are Bullish-Extreme with a score of 94.9 percent and the small traders (not shown in chart) are Bullish with a score of 68.9 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.0 35.3 5.1 – Percent of Open Interest Shorts: 5.2 56.3 2.9 – Net Position: 325,637 -363,869 38,232 – Gross Longs: 416,190 611,264 88,406 – Gross Shorts: 90,553 975,133 50,174 – Long to Short Ratio: 4.6 to 1 0.6 to 1 1.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 7.3 94.9 68.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 6.0 -3.3 -12.1   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week totaled a net position of -34,867 contracts in the data reported through Tuesday. This was a weekly reduction of -3,652 contracts from the previous week which had a total of -31,215 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.7 percent. The commercials are Bearish with a score of 46.7 percent and the small traders (not shown in chart) are Bearish with a score of 46.3 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.7 50.8 4.7 – Percent of Open Interest Shorts: 35.4 32.7 3.1 – Net Position: -34,867 32,127 2,740 – Gross Longs: 27,757 89,898 8,270 – Gross Shorts: 62,624 57,771 5,530 – Long to Short Ratio: 0.4 to 1 1.6 to 1 1.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 52.7 46.7 46.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -8.7 9.3 -5.9   Natural Gas Futures: The Natural Gas Futures large speculator standing this week totaled a net position of -115,012 contracts in the data reported through Tuesday. This was a weekly lowering of -2,483 contracts from the previous week which had a total of -112,529 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.1 percent. The commercials are Bullish with a score of 51.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.7 37.5 6.8 – Percent of Open Interest Shorts: 31.0 31.7 2.2 – Net Position: -115,012 64,340 50,672 – Gross Longs: 231,576 419,033 75,523 – Gross Shorts: 346,588 354,693 24,851 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 44.1 51.1 100.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 6.5 -9.0 15.8   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week totaled a net position of 33,798 contracts in the data reported through Tuesday. This was a weekly increase of 2,420 contracts from the previous week which had a total of 31,378 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.5 percent. The commercials are Bullish-Extreme with a score of 90.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 99.1 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.6 52.8 7.9 – Percent of Open Interest Shorts: 13.6 68.0 3.7 – Net Position: 33,798 -46,770 12,972 – Gross Longs: 75,744 162,371 24,256 – Gross Shorts: 41,946 209,141 11,284 – Long to Short Ratio: 1.8 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 4.5 90.3 99.1 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -9.3 3.3 39.2   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week totaled a net position of 6,455 contracts in the data reported through Tuesday. This was a weekly decline of -9,228 contracts from the previous week which had a total of 15,683 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bearish with a score of 36.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.0 50.8 14.4 – Percent of Open Interest Shorts: 15.1 60.1 6.9 – Net Position: 6,455 -32,434 25,979 – Gross Longs: 59,340 177,626 50,210 – Gross Shorts: 52,885 210,060 24,231 – Long to Short Ratio: 1.1 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 51.9 36.7 88.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 4.2 -10.3 23.6   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week totaled a net position of -9,639 contracts in the data reported through Tuesday. This was a weekly advance of 3,624 contracts from the previous week which had a total of -13,263 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 70.6 percent. The commercials are Bearish with a score of 27.9 percent and the small traders (not shown in chart) are Bearish with a score of 42.1 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 67.2 25.2 2.0 – Percent of Open Interest Shorts: 94.1 0.0 0.2 – Net Position: -9,639 9,002 637 – Gross Longs: 24,050 9,002 715 – Gross Shorts: 33,689 0 78 – Long to Short Ratio: 0.7 to 1 inf to 1 9.2 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 70.6 27.9 42.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -2.9 3.1 -1.8   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 21 Charts: Energy Speculator Positions Mixed

COT Week 21 Charts: Energy Speculator Positions Mixed

Invest Macro Invest Macro 28.05.2022 19:32
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 24th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning this week while three markets had lower contracts. Leading the gains for energy was WTI Crude Oil (9,124 contracts) and Natural Gas (3,442 contracts) with the Bloomberg Commodity Index (126 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were Heating Oil (-9,228 contracts) and Brent Crude Oil (-4,422 contracts) with Gasoline (-1,373 contracts) also registering lower bets on the week. Speculator strength standings for each Commodity where strength index is current net position compared to past three years, above 80 is bullish extreme, below 20 is bearish extreme OI Strength = Current Open Interest level compared to last 3 years range Spec Strength = Current Net Speculator level compared to last 3 years range Strength Move = Six week change of Spec Strength Data Snapshot of Commodity Market Traders | Columns Legend May-24-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,711,863 0 334,761 11 -374,627 91 39,866 71 Gold 530,098 22 183,813 14 -211,947 82 28,134 37 Silver 146,456 13 14,103 26 -23,297 88 9,194 3 Copper 186,433 17 -19,633 28 19,288 73 345 27 Palladium 7,919 7 -3,472 2 3,800 98 -328 25 Platinum 65,824 32 1,485 5 -6,683 96 5,198 34 Natural Gas 1,107,496 6 -111,570 45 63,847 51 47,723 93 Brent 183,629 27 -39,289 45 37,488 56 1,801 34 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 729,900 28 188,368 72 -159,047 34 -29,321 21 Corn 1,544,885 29 427,848 85 -372,522 19 -55,326 11 Coffee 211,266 5 37,072 71 -38,484 34 1,412 4 Sugar 847,420 11 209,487 80 -255,450 20 45,963 65 Wheat 326,607 8 26,344 53 -24,339 25 -2,005 100   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week was a net position of 334,761 contracts in the data reported through Tuesday. This was a weekly increase of 9,124 contracts from the previous week which had a total of 325,637 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 10.5 percent. The commercials are Bullish-Extreme with a score of 90.7 percent and the small traders (not shown in chart) are Bullish with a score of 71.2 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.7 34.1 5.0 – Percent of Open Interest Shorts: 5.1 56.0 2.7 – Net Position: 334,761 -374,627 39,866 – Gross Longs: 422,541 584,496 86,091 – Gross Shorts: 87,780 959,123 46,225 – Long to Short Ratio: 4.8 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 10.5 90.7 71.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 10.5 -9.3 -8.4   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week was a net position of -39,289 contracts in the data reported through Tuesday. This was a weekly decline of -4,422 contracts from the previous week which had a total of -34,867 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.2 percent. The commercials are Bullish with a score of 55.6 percent and the small traders (not shown in chart) are Bearish with a score of 33.6 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.8 52.6 3.7 – Percent of Open Interest Shorts: 36.2 32.2 2.7 – Net Position: -39,289 37,488 1,801 – Gross Longs: 27,144 96,551 6,828 – Gross Shorts: 66,433 59,063 5,027 – Long to Short Ratio: 0.4 to 1 1.6 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 45.2 55.6 33.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.0 5.9 -7.9   Natural Gas Futures: The Natural Gas Futures large speculator standing this week was a net position of -111,570 contracts in the data reported through Tuesday. This was a weekly gain of 3,442 contracts from the previous week which had a total of -115,012 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.1 percent. The commercials are Bullish with a score of 51.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 93.0 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.8 37.4 6.7 – Percent of Open Interest Shorts: 30.9 31.6 2.4 – Net Position: -111,570 63,847 47,723 – Gross Longs: 230,219 413,701 74,555 – Gross Shorts: 341,789 349,854 26,832 – Long to Short Ratio: 0.7 to 1 1.2 to 1 2.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 45.1 51.0 93.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.8 -8.4 0.9   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week was a net position of 32,425 contracts in the data reported through Tuesday. This was a weekly decrease of -1,373 contracts from the previous week which had a total of 33,798 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.1 percent. The commercials are Bullish-Extreme with a score of 93.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 87.1 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.4 55.0 7.6 – Percent of Open Interest Shorts: 12.9 69.1 4.0 – Net Position: 32,425 -43,599 11,174 – Gross Longs: 72,517 170,888 23,596 – Gross Shorts: 40,092 214,487 12,422 – Long to Short Ratio: 1.8 to 1 0.8 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 3.1 93.4 87.1 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.1 6.6 16.3   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week was a net position of 6,455 contracts in the data reported through Tuesday. This was a weekly lowering of -9,228 contracts from the previous week which had a total of 15,683 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bearish with a score of 36.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.0 50.8 14.4 – Percent of Open Interest Shorts: 15.1 60.1 6.9 – Net Position: 6,455 -32,434 25,979 – Gross Longs: 59,340 177,626 50,210 – Gross Shorts: 52,885 210,060 24,231 – Long to Short Ratio: 1.1 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 51.9 36.7 88.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.2 -10.3 23.6   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week was a net position of -9,513 contracts in the data reported through Tuesday. This was a weekly gain of 126 contracts from the previous week which had a total of -9,639 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 71.1 percent. The commercials are Bearish with a score of 27.9 percent and the small traders (not shown in chart) are Bearish with a score of 37.4 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 65.8 26.2 1.8 – Percent of Open Interest Shorts: 93.5 0.0 0.4 – Net Position: -9,513 9,010 503 – Gross Longs: 22,645 9,010 636 – Gross Shorts: 32,158 0 133 – Long to Short Ratio: 0.7 to 1 inf to 1 4.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 71.1 27.9 37.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -2.8 3.4 -5.5   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 22 Charts: Energy Speculator Positions Mixed led by Heating Oil, Gasoline

COT Week 22 Charts: Energy Speculator Positions Mixed led by Heating Oil, Gasoline

Invest Macro Invest Macro 04.06.2022 21:33
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 31st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning this week while three markets also had lower contracts. Leading the gains for energy were Heating Oil (6,319 contracts), Gasoline (1,265 contracts) and Natural Gas (1,202 contracts). Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-1,785 contracts) and Brent Crude Oil (-1,583 contracts) with Bloomberg Commodity Index (-1,048 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index is above its midpoint for the past 3 years while all the other markets are below the 50 percent level. Strength score trends (or move index, that show 6-week changes in strength scores) shows that heating oil, natural gas and WTI crude have had rising scores over the past six weeks. Data Snapshot of Commodity Market Traders | Columns Legend May-31-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,787,928 9 332,976 10 -373,761 91 40,785 72 Gold 513,722 18 172,589 5 -200,056 95 27,467 32 Silver 147,301 14 13,997 15 -23,861 99 9,864 6 Copper 189,923 19 -18,025 29 15,425 70 2,600 40 Palladium 6,538 1 -3,133 4 3,221 95 -88 39 Platinum 67,964 35 2,363 7 -6,501 96 4,138 20 Natural Gas 1,115,815 7 -110,368 45 59,679 50 50,689 100 Brent 181,699 25 -40,872 43 38,941 58 1,931 35 Heating Oil 248,966 15 121 43 -17,967 52 17,846 60 Soybeans 753,373 34 186,078 71 -158,757 34 -27,321 25 Corn 1,564,217 32 404,200 82 -353,348 22 -50,852 14 Coffee 214,170 8 43,015 76 -45,757 28 2,742 17 Sugar 848,463 11 201,680 78 -240,752 23 39,072 56 Wheat 331,136 11 22,309 48 -18,647 33 -3,662 91   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week recorded a net position of 332,976 contracts in the data reported through Tuesday. This was a weekly fall of -1,785 contracts from the previous week which had a total of 334,761 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 9.9 percent. The commercials are Bullish-Extreme with a score of 91.0 percent and the small traders (not shown in chart) are Bullish with a score of 72.5 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.6 34.8 5.0 – Percent of Open Interest Shorts: 5.0 55.7 2.7 – Net Position: 332,976 -373,761 40,785 – Gross Longs: 421,683 622,867 89,200 – Gross Shorts: 88,707 996,628 48,415 – Long to Short Ratio: 4.8 to 1 0.6 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 9.9 91.0 72.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.9 -8.7 -3.9   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week recorded a net position of -40,872 contracts in the data reported through Tuesday. This was a weekly lowering of -1,583 contracts from the previous week which had a total of -39,289 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.6 percent. The commercials are Bullish with a score of 58.0 percent and the small traders (not shown in chart) are Bearish with a score of 35.3 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.7 54.0 4.2 – Percent of Open Interest Shorts: 37.2 32.6 3.2 – Net Position: -40,872 38,941 1,931 – Gross Longs: 26,712 98,147 7,700 – Gross Shorts: 67,584 59,206 5,769 – Long to Short Ratio: 0.4 to 1 1.7 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 42.6 58.0 35.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.3 2.1 -6.9   Natural Gas Futures: The Natural Gas Futures large speculator standing this week recorded a net position of -110,368 contracts in the data reported through Tuesday. This was a weekly gain of 1,202 contracts from the previous week which had a total of -111,570 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.5 percent. The commercials are Bearish with a score of 49.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.5 37.4 6.8 – Percent of Open Interest Shorts: 30.4 32.0 2.3 – Net Position: -110,368 59,679 50,689 – Gross Longs: 228,487 417,276 75,815 – Gross Shorts: 338,855 357,597 25,126 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 45.5 49.6 100.0 – Strength Index Reading (3 Year Range): Bearish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.9 -7.1 6.6   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week recorded a net position of 33,690 contracts in the data reported through Tuesday. This was a weekly advance of 1,265 contracts from the previous week which had a total of 32,425 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.4 percent. The commercials are Bullish-Extreme with a score of 91.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 94.9 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.7 53.9 7.7 – Percent of Open Interest Shorts: 13.8 68.9 3.7 – Net Position: 33,690 -46,032 12,342 – Gross Longs: 76,089 165,784 23,735 – Gross Shorts: 42,399 211,816 11,393 – Long to Short Ratio: 1.8 to 1 0.8 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.4 91.0 94.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.0 4.9 26.7   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week recorded a net position of 121 contracts in the data reported through Tuesday. This was a weekly advance of 6,319 contracts from the previous week which had a total of -6,198 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.6 percent. The commercials are Bullish with a score of 52.1 percent and the small traders (not shown in chart) are Bullish with a score of 60.2 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.4 49.7 16.7 – Percent of Open Interest Shorts: 17.4 56.9 9.5 – Net Position: 121 -17,967 17,846 – Gross Longs: 43,360 123,782 41,618 – Gross Shorts: 43,239 141,749 23,772 – Long to Short Ratio: 1.0 to 1 0.9 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 42.6 52.1 60.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 13.5 -7.4 -7.8   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week recorded a net position of -10,561 contracts in the data reported through Tuesday. This was a weekly reduction of -1,048 contracts from the previous week which had a total of -9,513 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.1 percent. The commercials are Bearish with a score of 31.9 percent and the small traders (not shown in chart) are Bearish with a score of 38.5 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 63.6 28.5 1.9 – Percent of Open Interest Shorts: 93.7 0.0 0.4 – Net Position: -10,561 10,027 534 – Gross Longs: 22,382 10,027 679 – Gross Shorts: 32,943 0 145 – Long to Short Ratio: 0.7 to 1 inf to 1 4.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 67.1 31.9 38.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.8 7.7 -7.6   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 23 Charts: Energy Speculator Positions Mixed led by Brent Crude & Heating Oil

COT Week 23 Charts: Energy Speculator Positions Mixed led by Brent Crude & Heating Oil

Invest Macro Invest Macro 12.06.2022 15:16
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 7th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning this week while three markets had lower contracts. Leading the gains for energy markets was Brent Crude Oil (4,774 contracts) and Heating Oil (4,765 contracts) with Bloomberg Commodity Index (2,178 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-4,720 contracts) and Natural Gas (-3,974 contracts) with Gasoline (-3,202 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index is the highest above its midpoint for the past 3 years while Brent, Heating Oil and Natural Gas are slightly below the 50 percent level. Strength score trends (or move index, that show 6-week changes in strength scores) shows that Heating Oil and the Bloomberg Commodity Index bets have been rising the strongest over the past six weeks while Gasoline is moving the opposite way. Data Snapshot of Commodity Market Traders | Columns Legend Jun-07-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,790,618 10 328,256 8 -369,033 93 40,777 72 Gold 494,130 12 175,268 7 -199,886 95 24,618 18 Silver 148,294 15 17,404 5 -27,990 94 10,586 10 Copper 194,187 22 -3,714 40 879 60 2,835 42 Palladium 7,035 3 -3,461 2 3,581 97 -120 37 Platinum 65,295 31 5,933 12 -9,742 92 3,809 15 Natural Gas 1,127,731 10 -114,342 44 66,419 52 47,923 93 Brent 169,802 16 -36,098 51 34,208 50 1,890 35 Heating Oil 261,651 20 4,886 50 -24,428 45 19,542 66 Soybeans 760,444 35 176,644 68 -148,390 39 -28,254 23 Corn 1,557,167 31 391,264 80 -337,137 24 -54,127 12 Coffee 222,583 15 48,767 81 -51,363 23 2,596 16 Sugar 849,814 12 195,403 77 -234,496 24 39,093 56 Wheat 333,705 12 23,881 50 -19,863 31 -4,018 90   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week recorded a net position of 328,256 contracts in the data reported through Tuesday. This was a weekly decrease of -4,720 contracts from the previous week which had a total of 332,976 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 8.2 percent. The commercials are Bullish-Extreme with a score of 92.9 percent and the small traders (not shown in chart) are Bullish with a score of 72.5 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.7 34.8 5.2 – Percent of Open Interest Shorts: 5.3 55.4 2.9 – Net Position: 328,256 -369,033 40,777 – Gross Longs: 423,882 622,320 92,501 – Gross Shorts: 95,626 991,353 51,724 – Long to Short Ratio: 4.4 to 1 0.6 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 8.2 92.9 72.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.3 -4.2 -2.1   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week recorded a net position of -36,098 contracts in the data reported through Tuesday. This was a weekly increase of 4,774 contracts from the previous week which had a total of -40,872 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.6 percent. The commercials are Bullish with a score of 50.2 percent and the small traders (not shown in chart) are Bearish with a score of 34.8 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.3 51.5 4.4 – Percent of Open Interest Shorts: 36.6 31.4 3.3 – Net Position: -36,098 34,208 1,890 – Gross Longs: 26,009 87,488 7,434 – Gross Shorts: 62,107 53,280 5,544 – Long to Short Ratio: 0.4 to 1 1.6 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 50.6 50.2 34.8 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.1 -2.3 -14.1   Natural Gas Futures: The Natural Gas Futures large speculator standing this week recorded a net position of -114,342 contracts in the data reported through Tuesday. This was a weekly decrease of -3,974 contracts from the previous week which had a total of -110,368 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.3 percent. The commercials are Bullish with a score of 51.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 93.5 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.8 37.2 6.8 – Percent of Open Interest Shorts: 31.0 31.3 2.6 – Net Position: -114,342 66,419 47,923 – Gross Longs: 235,073 419,847 76,779 – Gross Shorts: 349,415 353,428 28,856 – Long to Short Ratio: 0.7 to 1 1.2 to 1 2.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 44.3 51.8 93.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.9 -1.6 4.6   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week recorded a net position of 30,488 contracts in the data reported through Tuesday. This was a weekly decrease of -3,202 contracts from the previous week which had a total of 33,690 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.2 percent. The commercials are Bullish-Extreme with a score of 95.2 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.5 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.6 52.7 8.0 – Percent of Open Interest Shorts: 14.7 66.2 4.3 – Net Position: 30,488 -41,866 11,378 – Gross Longs: 75,841 162,330 24,623 – Gross Shorts: 45,353 204,196 13,245 – Long to Short Ratio: 1.7 to 1 0.8 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 1.2 95.2 88.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.9 6.4 16.0   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week recorded a net position of 4,886 contracts in the data reported through Tuesday. This was a weekly rise of 4,765 contracts from the previous week which had a total of 121 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.6 percent. The commercials are Bearish with a score of 45.3 percent and the small traders (not shown in chart) are Bullish with a score of 66.1 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.3 49.5 17.5 – Percent of Open Interest Shorts: 15.4 58.9 10.1 – Net Position: 4,886 -24,428 19,542 – Gross Longs: 45,231 129,588 45,902 – Gross Shorts: 40,345 154,016 26,360 – Long to Short Ratio: 1.1 to 1 0.8 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.6 45.3 66.1 – Strength Index Reading (3 Year Range): Bearish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 17.2 -9.7 -9.1   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week recorded a net position of -8,383 contracts in the data reported through Tuesday. This was a weekly increase of 2,178 contracts from the previous week which had a total of -10,561 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 75.4 percent. The commercials are Bearish with a score of 23.5 percent and the small traders (not shown in chart) are Bearish with a score of 37.9 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.5 62.0 1.5 – Percent of Open Interest Shorts: 45.0 51.3 0.8 – Net Position: -8,383 7,865 518 – Gross Longs: 24,512 45,368 1,126 – Gross Shorts: 32,895 37,503 608 – Long to Short Ratio: 0.7 to 1 1.2 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 75.4 23.5 37.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 10.8 -10.2 -6.8   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Swing Overview – Week 23 2022

The Swing Overview – Week 23 2022

Purple Trading Purple Trading 17.06.2022 08:53
The Swing Overview - Week 23 Major global stock indices broke through their support levels after several days of range movement in response to the tightening economy, the ongoing war in Ukraine, slowing economic growth and high inflation. The Reserve Bank of Australia raised its interest rate by 0.50%. The ECB decided to start raising interest rates by 0.25% from July 2022. The winner of last week is the US dollar, which continues to strengthen. Macroeconomic data Data from the US labour market was highly anticipated. The job creation indicator, the so-called NFP, surprised the markets positively. Analysts expected that 325,000 new jobs had been created in May. In fact, 390 thousand jobs were created in the US. Unemployment is at 3.6%. The information on the growth of hourly wages, which is a leading indicator of inflation, was important. Average hourly earnings rose 0.3% in May, less than analysts who expected 0.4%.   Unemployment claims reached 229,000 this week. This is the highest levels since 3/3/2022. However, this is not an extreme increase. The number of claims is still in the pre-pandemic average area. Nevertheless, it can be seen that since 7/4/2022, when the number of applications reached 166 thousand, the number of applications is slowly increasing and this indicator will be closely monitored.  The ISM index of purchasing managers in the US service sector reached 55.9 in May. This is lower than the previous month's reading of 57.1. A value above 50 still points to expansion in the sector although the decline in the reading indicates  economy.   The yield on the US 10-year bond is close to its peak and is currently around 3%. The rise in yields has been followed by a rise in the US dollar. The dollar index has surpassed 103. The reason for the strengthening of the dollar is the aggressive tightening of the economy by the US Fed, which began reducing the central bank's balance sheet on June 1, 2022. In practice, this means that the Fed will let expire the government bonds it previously bought as part of QE and will not reinvest them further. The first tranche of bonds will expire on June 15, so the effect of this operation remains to be seen. Figure 1: The US 10-year bond yields and USD index on the daily chart   The SP 500 Index The SP 500 index has been moving in a narrow range for the past few days between 4,200, where resistance is and 4,080, where support has been tested several times. This support was broken and has become the new resistance as we can see on the H4 chart.   Figure 2: The SP 500 on H4 and D1 chart   The catalyst for this strong initiation move is the strong US dollar and rising bond yields. Therefore, the current resistance is in the 4,075 - 4,085 range.  The nearest support is 3,965 - 3,970 according to the H4 chart. The next support is 3,879 - 3,907.   German DAX index Macroeconomic data that affected the DAX was manufacturing orders for April, which fell 2.7% month-on-month, while analysts were expecting a 0.3% rise. Industrial production in Germany rose by 0.7% in April (expectations were for 1.0%). The war in Ukraine has a strong impact on the weaker figures. The catalyst for breaking support was the ECB's decision to raise interest rates, which the bank will start implementing from July 2022. Figure 3: German DAX index on H4 and daily chart The DAX is below the SMA 100 moving average according to the daily and H4 chart. This shows a bearish sentiment. The nearest resistance is 14,300 - 14,335. Support is at 13,870 - 13,900 according to the H4 chart.   The ECB left the interest rate unchanged  The ECB left interest rates unchanged on June 9, 2022, so the key rate is still at 0.0%. However, the bank said that it will proceed with a rate hike from July, when the rate is expected to rise by 0.25%. The next hike will then be in September, probably again by 0.25%. The bank pointed to the high inflation rate, which is expected to reach 6.8% for 2022. Inflation is expected to fall to 3.4% in 2023 and 2.1% in 2024.  Figure 4: The EUR/USD on H4 and daily chart According to the bank, a significant risk is Russia's unjustified aggression against Ukraine, which is causing problems in supply chains and pushing energy and some commodity prices up. The result is a slowdown in the growth of the European economy. The bank also announced that it will end its asset purchase program as of July 1, 2022. This is the soft end of this program, as the money that will flow from matured assets will continue to be reinvested by the bank. In practice, this means that the ECB's balance sheet will not be further inflated, but for now, unlike the Fed’s balance sheet, the bank has no plans to reduce its balance sheet. This, coupled with the more moderate rate hike plans and the existence of the above risks, has supported the dollar and the euro has begun to weaken sharply in response to the ECB announcement. The resistance is 1.0760-1.0770. Current support at 1.063-1.064 is broken and it will become new resistance if the break is confirmed. The next support according to the H4 chart is 1.0530 - 1.0550.   Australian central bank surprises with aggressive approach In Australia, the central bank raised its policy rate by 0.50%. Analysts had expected the bank to raise the rate by 0.25%. Thus, the current rate on the Australian dollar is 0.80%. However, this aggressive increase did not strengthen the Australian dollar, which surprisingly weakened. The reason for this is the strong US dollar and also the risk off sentiment that is taking place in the equity indices.  Also impacting the Aussie is the situation in China, where there is zero tolerance of COVID-19. This will impact the country's economic growth, which is very likely to fall short of the 5.5% that was originally projected.  Figure 5: The AUD/USD on H4 and daily chart According to the H4 chart, the AUD/USD currency pair has broken below the SMA 100 moving average, which is a bearish signal. The nearest resistance is 0.7140 - 0.7150. The support is in the zone 0.7030 - 0.7040. 
COT Week 24 Charts: Energy Speculator Positions Mixed led by Heating Oil & WTI Crude

COT Week 24 Charts: Energy Speculator Positions Mixed led by Heating Oil & WTI Crude

Invest Macro Invest Macro 18.06.2022 13:18
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 14th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning this week while three markets had lower contracts. Leading the gains for energy markets was Heating Oil (3,589 contracts) and then Gasoline (968 contracts) with the Bloomberg Commodity Index (72 contracts) also showing a positive week. Meanwhile, on the downside, the markets leading the declines in speculator bets this week were WTI Crude Oil (-25,310 contracts) and Natural Gas (-9,143 contracts) while Brent Crude Oil (-291 contracts) also registered lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index has the highest strength score with a 75.7 strength score followed by Heating Oil and Brent Crude Oil. WTI Crude Oil (currently at the lowest level of past three years or 0 percent) and Gasoline (2.2 percent) currently are in bearish-extreme levels with speculator sentiment very weak. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Heating Oil and the Bloomberg Commodity Index have had rising scores over the past six weeks while all the other energy markets have had declining moves. Data Snapshot of Commodity Market Traders | Columns Legend Jun-14-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,715,674 0 302,946 0 -341,654 100 38,708 70 Gold 497,456 13 154,598 0 -178,569 100 23,971 15 Silver 151,978 18 14,005 0 -22,047 100 8,042 0 Copper 187,247 17 -13,797 32 10,287 67 3,510 46 Palladium 7,740 6 -4,057 0 4,354 100 -297 27 Platinum 66,613 33 2,214 7 -6,793 96 4,579 26 Natural Gas 1,053,265 0 -123,485 42 74,310 54 49,175 96 Brent 171,026 17 -36,389 50 34,601 51 1,788 33 Heating Oil 268,199 23 8,475 55 -28,686 41 20,211 68 Soybeans 754,428 34 182,667 70 -155,663 37 -27,004 25 Corn 1,521,565 25 399,775 81 -344,196 23 -55,579 11 Coffee 202,656 0 46,885 79 -48,399 25 1,514 5 Sugar 800,806 1 170,483 72 -198,006 31 27,523 42 Wheat 336,890 13 20,435 46 -18,089 34 -2,346 98   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week totaled a net position of 302,946 contracts in the data reported through Tuesday. This was a weekly reduction of -25,310 contracts from the previous week which had a total of 328,256 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 69.6 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.9 35.3 5.3 – Percent of Open Interest Shorts: 6.2 55.2 3.0 – Net Position: 302,946 -341,654 38,708 – Gross Longs: 409,427 604,944 90,476 – Gross Shorts: 106,481 946,598 51,768 – Long to Short Ratio: 3.8 to 1 0.6 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 69.6 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.5 9.2 -8.2   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week totaled a net position of -36,389 contracts in the data reported through Tuesday. This was a weekly fall of -291 contracts from the previous week which had a total of -36,098 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.1 percent. The commercials are Bullish with a score of 50.8 percent and the small traders (not shown in chart) are Bearish with a score of 33.4 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.6 52.0 4.3 – Percent of Open Interest Shorts: 34.9 31.8 3.3 – Net Position: -36,389 34,601 1,788 – Gross Longs: 23,246 88,924 7,365 – Gross Shorts: 59,635 54,323 5,577 – Long to Short Ratio: 0.4 to 1 1.6 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 50.1 50.8 33.4 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -15.2 14.3 6.5   Natural Gas Futures: The Natural Gas Futures large speculator standing this week totaled a net position of -123,485 contracts in the data reported through Tuesday. This was a weekly reduction of -9,143 contracts from the previous week which had a total of -114,342 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 41.5 percent. The commercials are Bullish with a score of 54.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.4 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.9 38.9 7.1 – Percent of Open Interest Shorts: 32.6 31.8 2.4 – Net Position: -123,485 74,310 49,175 – Gross Longs: 220,256 409,613 74,311 – Gross Shorts: 343,741 335,303 25,136 – Long to Short Ratio: 0.6 to 1 1.2 to 1 3.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 41.5 54.3 96.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.7 0.5 10.2   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week totaled a net position of 31,456 contracts in the data reported through Tuesday. This was a weekly increase of 968 contracts from the previous week which had a total of 30,488 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.2 percent. The commercials are Bullish-Extreme with a score of 93.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 94.1 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.8 53.2 8.2 – Percent of Open Interest Shorts: 14.7 67.4 4.2 – Net Position: 31,456 -43,672 12,216 – Gross Longs: 76,744 164,469 25,175 – Gross Shorts: 45,288 208,141 12,959 – Long to Short Ratio: 1.7 to 1 0.8 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 2.2 93.4 94.1 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.0 5.3 10.7   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week totaled a net position of 8,475 contracts in the data reported through Tuesday. This was a weekly lift of 3,589 contracts from the previous week which had a total of 4,886 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.9 percent. The commercials are Bearish with a score of 40.7 percent and the small traders (not shown in chart) are Bullish with a score of 68.4 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.1 50.5 16.8 – Percent of Open Interest Shorts: 14.0 61.2 9.2 – Net Position: 8,475 -28,686 20,211 – Gross Longs: 45,945 135,386 45,006 – Gross Shorts: 37,470 164,072 24,795 – Long to Short Ratio: 1.2 to 1 0.8 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 54.9 40.7 68.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 24.5 -15.6 -6.8   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week totaled a net position of -8,311 contracts in the data reported through Tuesday. This was a weekly gain of 72 contracts from the previous week which had a total of -8,383 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 75.7 percent. The commercials are Bearish with a score of 23.2 percent and the small traders (not shown in chart) are Bearish with a score of 38.9 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.0 51.7 0.7 – Percent of Open Interest Shorts: 38.5 42.8 0.1 – Net Position: -8,311 7,764 547 – Gross Longs: 25,428 45,267 619 – Gross Shorts: 33,739 37,503 72 – Long to Short Ratio: 0.8 to 1 1.2 to 1 8.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 75.7 23.2 38.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 19.3 -18.9 -5.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 25 Charts: Energy Speculator bets on defensive led by WTI Crude Oil & Natural Gas

COT Week 25 Charts: Energy Speculator bets on defensive led by WTI Crude Oil & Natural Gas

Invest Macro Invest Macro 25.06.2022 14:35
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy markets speculator bets were lower on the week as just two out of the six energy markets we cover had higher positioning this week while four markets had lower contracts. Leading the gains for energy markets was Heating Oil (1,089 contracts) with the Bloomberg Commodity Index (259 contracts) also showing a small positive week. Meanwhile, leading the declines in speculator bets this week was WTI Crude Oil (-13,444 contracts) with Natural Gas (-7,384 contracts), Brent Crude Oil (-1,621 contracts) and Gasoline (-49 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index and the Heating Oil are both in bullish levels at the moment. All other energy markets are below the midpoint of the past 3-years and have bearish or extreme bearish readings. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the Bloomberg Commodity Index and the Heating Oil are again leading the six week trends with 19.9 percent and 20.8 percent, respectively. Brent Oil leads the downside trends with -11.4 percent over the past six weeks.   Data Snapshot of Commodity Market Traders | Columns Legend Jun-21-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,658,636 0 289,502 0 -323,915 100 34,413 64 Gold 500,276 14 163,287 4 -186,929 96 23,642 14 Silver 145,356 12 18,419 7 -27,250 93 8,831 4 Copper 187,170 17 -20,938 27 18,928 72 2,010 37 Palladium 7,641 6 -4,046 0 4,511 100 -465 17 Platinum 64,946 30 1,491 6 -6,397 96 4,906 30 Natural Gas 1,030,971 0 -130,869 39 85,977 58 44,892 86 Brent 173,098 18 -38,010 47 36,052 53 1,958 36 Heating Oil 268,818 23 9,564 56 -28,204 41 18,640 63 Soybeans 745,494 32 178,379 68 -152,968 38 -25,411 28 Corn 1,512,152 23 380,169 79 -326,474 25 -53,695 12 Coffee 192,832 0 49,371 81 -52,348 22 2,977 20 Sugar 779,773 0 163,111 70 -181,280 34 18,169 30 Wheat 320,326 6 19,067 44 -15,407 38 -3,660 91   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week was a net position of 289,502 contracts in the data reported through Tuesday. This was a weekly decline of -13,444 contracts from the previous week which had a total of 302,946 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 63.5 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.4 35.9 5.2 – Percent of Open Interest Shorts: 6.0 55.4 3.2 – Net Position: 289,502 -323,915 34,413 – Gross Longs: 388,496 594,860 86,668 – Gross Shorts: 98,994 918,775 52,255 – Long to Short Ratio: 3.9 to 1 0.6 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 63.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.1 10.7 -13.1   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week was a net position of -38,010 contracts in the data reported through Tuesday. This was a weekly decline of -1,621 contracts from the previous week which had a total of -36,389 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.4 percent. The commercials are Bullish with a score of 53.2 percent and the small traders (not shown in chart) are Bearish with a score of 35.7 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.2 51.5 4.0 – Percent of Open Interest Shorts: 37.1 30.7 2.8 – Net Position: -38,010 36,052 1,958 – Gross Longs: 26,225 89,195 6,865 – Gross Shorts: 64,235 53,143 4,907 – Long to Short Ratio: 0.4 to 1 1.7 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 47.4 53.2 35.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -11.4 9.1 17.7   Natural Gas Futures: The Natural Gas Futures large speculator standing this week was a net position of -130,869 contracts in the data reported through Tuesday. This was a weekly lowering of -7,384 contracts from the previous week which had a total of -123,485 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.3 percent. The commercials are Bullish with a score of 58.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 86.3 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.7 39.8 7.0 – Percent of Open Interest Shorts: 33.4 31.5 2.7 – Net Position: -130,869 85,977 44,892 – Gross Longs: 213,487 410,457 72,315 – Gross Shorts: 344,356 324,480 27,423 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.3 58.0 86.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.5 7.0 -8.6   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week was a net position of 31,407 contracts in the data reported through Tuesday. This was a weekly lowering of -49 contracts from the previous week which had a total of 31,456 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.1 percent. The commercials are Bullish-Extreme with a score of 95.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 83.8 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.3 54.3 7.8 – Percent of Open Interest Shorts: 14.8 68.3 4.3 – Net Position: 31,407 -42,080 10,673 – Gross Longs: 75,835 162,816 23,491 – Gross Shorts: 44,428 204,896 12,818 – Long to Short Ratio: 1.7 to 1 0.8 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 2.1 95.0 83.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.0 2.0 -13.5   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week was a net position of 9,564 contracts in the data reported through Tuesday. This was a weekly lift of 1,089 contracts from the previous week which had a total of 8,475 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.5 percent. The commercials are Bearish with a score of 41.2 percent and the small traders (not shown in chart) are Bullish with a score of 62.9 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.1 51.0 16.7 – Percent of Open Interest Shorts: 13.5 61.5 9.8 – Net Position: 9,564 -28,204 18,640 – Gross Longs: 45,955 137,166 44,894 – Gross Shorts: 36,391 165,370 26,254 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 56.5 41.2 62.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 20.8 -12.7 -7.7   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week was a net position of -8,052 contracts in the data reported through Tuesday. This was a weekly boost of 259 contracts from the previous week which had a total of -8,311 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.7 percent. The commercials are Bearish with a score of 23.2 percent and the small traders (not shown in chart) are Bearish with a score of 29.7 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.8 69.5 0.7 – Percent of Open Interest Shorts: 39.1 57.5 0.2 – Net Position: -8,052 7,764 288 – Gross Longs: 17,434 45,267 447 – Gross Shorts: 25,486 37,503 159 – Long to Short Ratio: 0.7 to 1 1.2 to 1 2.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 76.7 23.2 29.7 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 19.9 -18.8 -11.7   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Swing Overview – Week 25 2022

The Swing Overview – Week 25 2022

Purple Trading Purple Trading 27.06.2022 13:52
The Swing Overview – Week 25 There was a rather quiet week in which the major world stock indices shook off previous losses and have been slowly rising since Monday. However, this is probably only a temporary correction of the current bearish trend.  The CNB Bank Board met for the last time in its old composition and raised the interest rate to 7%, the highest level since 1999. However, the koruna barely reacted to this increase. The reason is that the main risks are still in place and fear of a recession keeps the markets in a risk-off sentiment that benefits the US dollar. Macroeconomic data We had a bit of a quiet week when it comes to macroeconomic data in the US. Industrial production data was reported, which grew by 0.2% month-on-month in May, which is less than the growth seen in April, when production grew by 1.4%. While the growth is slower than expected, it is still growth, which is a positive thing.   In terms of labor market data, the number of jobless claims held steady last week, reaching 229k. Thus, compared to the previous week, the number of claims fell by 2 thousand.   The US Dollar took a break in this quiet week and came down from its peak which is at 106, 86. Overall, however, the dollar is still in an uptrend. The US 10-year bond yields also fell last week and are currently hovering around 3%. The fall in bond yields was then a positive boost for equity indices. Figure 1: US 10-year bond yields and USD index on the daily chart   The SP 500 Index The SP 500 index has been gaining since Monday, June 20, 2022. However, this is probably not a signal of a major bullish reversal. Fundamental reasons still rather speak for a weakening and so it could be a short-term correction of the current bearish trend. The rise is probably caused by long-term investors who were buying the dip. Next week the US will report the GDP data which could be the catalyst for further movement.  Figure 2: The SP 500 on H4 and D1 chart   The index has currently reached the resistance level according to the H4 chart, which is in the region of 3,820 - 3,836. The next strong resistance is then in the area of 3,870 - 3,900 where the previous support was broken and turned into the resistance. The current nearest support is 3 640 - 3 670.    German DAX index The manufacturing PMI for June came in at 52.0. The previous month's PMI was 54.8. While a value above 50 indicates an expected expansion, it must be said that the PMI has essentially been declining since February 2022. This, together with other data coming out of Germany, suggests a certain pessimism, which is also reflected in the DAX index. Figure 3: German DAX index on H4 and daily chart The DAX broke support according to the H4 chart at 12,950 - 12,980 but then broke back above that level, so we don't have a valid breakout. Overall, however, the DAX is in a downtrend and the technical analysis does not show a stronger sign of a reversal of this trend yet. The nearest resistance according to the H4 chart is 13,130 - 13,190. The next resistance is then at 13 420 - 13 440. Strong support according to the daily chart is 12,443 - 12,600.   Eurozone inflation at a new record Consumer inflation in the Eurozone for May rose by 8.1% year-on-year as expected by analysts. On a month-on-month basis, inflation added 0.8% compared to April. The rise in inflation could support the ECB's decision to raise rates possibly by more than the 0.25% expected so far, which is expected to happen at the July meeting.  Figure 4: EUR/USD on H4 and daily chart From a technical perspective, the euro has bounced off support on the pair with the US dollar according to the daily chart, which is in the 1.0340 - 1.0370 range and continues to strengthen. Overall, however, the pair is still in a downtrend. The US Fed has been much more aggressive in fighting inflation than the ECB and this continues to put pressure on the bearish trend in the euro. The nearest resistance according to the H4 chart is at 1.058 - 1.0600. Strong resistance according to the daily chart is at 1.0780 - 1.0800.   The Czech National Bank raised the interest rate again Rising inflation, which has already reached 16% in the Czech Republic, forced the CNB's board to raise interest rates again. The key interest rate is now at 7%. The last time the interest rate was this high was in 1999. This is the last decision of the old Bank Board. In August, the new board, which is not clearly hawkish, will decide on monetary policy. Therefore, it will be very interesting to see how they approach the rising inflation.   The current risks, according to the CNB, are higher price growth at home and abroad, the risk of a halt in energy supplies from Russia and generally rising inflation expectations. The lingering risk is, of course, the war in Ukraine. The CNB has also decided to continue intervening in the market to keep the Czech koruna exchange rate within acceptable limits and prevent it from depreciating, which would increase import inflation pressures. Figure 5: The USD/CZK and The EUR/CZK on the daily chart Looking at the charts, the koruna hardly reacted at all to the CNB's decision to raise rates sharply. Against the dollar, the koruna is weakening somewhat, while against the euro the koruna is holding its value around 24.60 - 24.80. The appreciation of the koruna after the interest rate hike was probably prevented by uncertainty about how the new board will treat inflation, and also by the fact that there is a risk-off sentiment in global markets and investors prefer so-called safe havens in such cases, which include the US dollar.  
COT Week 26 Charts: Energy Speculator bets mostly higher led by WTI Crude Oil & Natural Gas

COT Week 26 Charts: Energy Speculator bets mostly higher led by WTI Crude Oil & Natural Gas

Invest Macro Invest Macro 02.07.2022 17:24
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mostly higher this week as four out of the six energy markets we cover had higher positioning this week while two markets had lower contracts. Leading the gains for energy markets was WTI Crude Oil (10,190 contracts) and Natural Gas (1,450 contracts) with the Bloomberg Commodity Index (703 contracts) and Gasoline (692 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week was Brent Crude Oil (-4,667 contracts) with Heating Oil (-2,056 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that the Bloomberg Commodity Index (79 percent) and Heating Oil (54 percent) are above the midpoint for the past 3 years while all the other markets are below the 50 percent level. Gasoline and WTI Crude are in extreme bearish positions as each come in at 3 percent currently. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Heating Oil (16 percent) and the Bloomberg Commodity Index (9 percent) are also the only markets that have rising trend scores currently. Brent Crude Oil (-13 percent) and WTI Crude (-9 percent) are leading the downside trends. Data Snapshot of Commodity Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,651,566 0 299,692 3 -327,938 99 28,246 55 Gold 497,005 13 157,693 2 -182,007 98 24,314 16 Silver 135,775 3 10,891 0 -18,485 100 7,594 0 Copper 182,352 14 -30,696 20 31,197 81 -501 22 Palladium 7,765 6 -3,825 1 4,441 100 -616 8 Platinum 68,232 36 -1,306 2 -3,381 100 4,687 27 Natural Gas 987,740 0 -129,419 40 90,840 60 38,579 71 Brent 173,920 19 -42,677 40 41,434 62 1,243 26 Heating Oil 269,168 23 7,508 53 -25,743 44 18,235 62 Soybeans 653,337 11 137,193 56 -106,705 52 -30,488 20 Corn 1,338,054 0 328,102 72 -274,110 33 -53,992 12 Coffee 194,896 2 45,200 78 -47,147 26 1,947 9 Sugar 734,324 0 122,709 62 -132,877 43 10,168 20 Wheat 291,041 0 7,679 29 -1,871 57 -5,808 80   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week resulted in a net position of 299,692 contracts in the data reported through Tuesday. This was a weekly advance of 10,190 contracts from the previous week which had a total of 289,502 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.4 percent. The commercials are Bullish-Extreme with a score of 98.6 percent and the small traders (not shown in chart) are Bullish with a score of 54.8 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.0 36.3 4.9 – Percent of Open Interest Shorts: 5.8 56.2 3.2 – Net Position: 299,692 -327,938 28,246 – Gross Longs: 396,046 599,957 80,880 – Gross Shorts: 96,354 927,895 52,634 – Long to Short Ratio: 4.1 to 1 0.6 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 3.4 98.6 54.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.7 12.6 -14.1   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week resulted in a net position of -42,677 contracts in the data reported through Tuesday. This was a weekly decline of -4,667 contracts from the previous week which had a total of -38,010 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.6 percent. The commercials are Bullish with a score of 62.2 percent and the small traders (not shown in chart) are Bearish with a score of 26.0 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.8 53.8 3.6 – Percent of Open Interest Shorts: 39.3 30.0 2.9 – Net Position: -42,677 41,434 1,243 – Gross Longs: 25,712 93,538 6,241 – Gross Shorts: 68,389 52,104 4,998 – Long to Short Ratio: 0.4 to 1 1.8 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.6 62.2 26.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -13.1 15.5 -20.3   Natural Gas Futures: The Natural Gas Futures large speculator standing this week resulted in a net position of -129,419 contracts in the data reported through Tuesday. This was a weekly advance of 1,450 contracts from the previous week which had a total of -130,869 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.7 percent. The commercials are Bullish with a score of 59.5 percent and the small traders (not shown in chart) are Bullish with a score of 71.5 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.6 40.8 6.3 – Percent of Open Interest Shorts: 33.7 31.6 2.4 – Net Position: -129,419 90,840 38,579 – Gross Longs: 203,204 402,705 62,574 – Gross Shorts: 332,623 311,865 23,995 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.7 59.5 71.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.3 8.4 -28.5   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week resulted in a net position of 32,099 contracts in the data reported through Tuesday. This was a weekly advance of 692 contracts from the previous week which had a total of 31,407 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.8 percent. The commercials are Bullish-Extreme with a score of 94.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.7 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.6 53.7 8.0 – Percent of Open Interest Shorts: 15.4 68.4 4.4 – Net Position: 32,099 -42,454 10,355 – Gross Longs: 76,657 154,967 23,177 – Gross Shorts: 44,558 197,421 12,822 – Long to Short Ratio: 1.7 to 1 0.8 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 2.8 94.6 81.7 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.7 4.3 -17.4   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week resulted in a net position of 7,508 contracts in the data reported through Tuesday. This was a weekly fall of -2,056 contracts from the previous week which had a total of 9,564 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.5 percent. The commercials are Bearish with a score of 43.9 percent and the small traders (not shown in chart) are Bullish with a score of 61.5 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.5 52.6 14.9 – Percent of Open Interest Shorts: 13.7 62.1 8.2 – Net Position: 7,508 -25,743 18,235 – Gross Longs: 44,423 141,515 40,222 – Gross Shorts: 36,915 167,258 21,987 – Long to Short Ratio: 1.2 to 1 0.8 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 53.5 43.9 61.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 16.0 -9.9 -5.4   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week resulted in a net position of -7,349 contracts in the data reported through Tuesday. This was a weekly gain of 703 contracts from the previous week which had a total of -8,052 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.4 percent. The commercials are Bearish with a score of 20.4 percent and the small traders (not shown in chart) are Bearish with a score of 21.6 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.6 68.6 0.7 – Percent of Open Interest Shorts: 38.8 57.9 0.2 – Net Position: -7,349 7,041 308 – Gross Longs: 18,077 45,029 456 – Gross Shorts: 25,426 37,988 148 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.4 20.4 21.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.8 -7.5 -13.1   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Swing Overview - Week 27 2022

The Swing Overview - Week 27 2022

Purple Trading Purple Trading 08.07.2022 10:27
The Swing Overview - Week 27 2022 The fall in US bond yields, the rise in the US dollar and the sharp weakening in the euro, which is heading towards parity with the dollar. This is how the last week, in which stock indices cautiously strengthened and made a correction in the downward trend, could be characterised. It is worth noting that Germany has a negative trade balance for the first time since May 1991. Is the country losing its reputation as an economic powerhouse of Europe? Macroeconomic data The ISM in manufacturing, which shows purchasing managers' expectations of economic developments in the short term, came in at 53.0 for June.  While a value above 50 still indicates an expected expansion in the sector, the trend since the beginning of the year has been declining, indicating worsening of optimism.   Unemployment claims reached 231,000 last week. This is still a level that is fairly normal. However, we note that this is the 6th week in a row that the number of claims has been rising. The crucial news on the labour market will then be shown in Friday's NFP data.   On Wednesday, the minutes of the last FOMC meeting were presented, which confirmed that another 50-75 point rate hike is likely in July. The minutes also stated that the Fed could tighten further its hawkish policy if inflationary pressures persist. The Fed's target is to push inflation down to around 2%.   The Fed's hawkish tone has led to a strengthening of the dollar, which has reached a level over 107, its highest level since October 2002. Following the presentation of the FOMC minutes, the US Treasury yields started to rise again. Figure 1: The US 10-year bond yields and the USD index on the daily chart   The SP 500 Index The temporary decline in US Treasury yields was the reason for the correction in the bearish trend in equity indices. However, the bear market still continues to be supported fundamentally by fears of an impending recession.  Figure 2: The SP 500 on H4 and D1 chart   The nearest resistance according to the H4 chart is in the 3,930 - 3,950 range. A support is at 3,740 - 3,750 and then 3,640 - 3,670.    German DAX index The German manufacturing PMI for June came in at 52.0 (previous month 54.8). The downward trend shows a deterioration in optimism.    It is worth noting that Germany's trade balance is negative for the first time since May 1991, i.e. imports are higher than exports. The current trade balance is - EUR 1 billion. The market was expecting a surplus of 2.7 billion. Rising prices of imported energy and a reduction in exports to Russia have contributed to the negative balance. Figure 3: German DAX index on H4 and daily chart The DAX is in a downtrend. On the H4 chart, it has reached the moving average EMA 50. The resistance is in the range of 12,900 - 12,960. Strong support on the daily chart is 12,443 - 12,500, which was tested again last week.    Euro is near parity with the USD Even high inflation, which is already at 8.6%, has not stopped the euro from falling. It seems that parity with the dollar could be reached very soon. The negative trade balance in Germany has contributed very significantly to the euro's decline.  Figure 4: EUR/USD on H4 and daily chart The nearest resistance according to the H4 chart is at 1.020 - 1.021. Support according to the daily chart would be only at parity with the dollar at 1.00. Reaching this value would represent a unique situation that has not occurred on the EUR/USD pair since 2002.   Australia raised interest rates The Reserve Bank of Australia raised the interest rate by 0.50% as expected. The current interest rate now stands at 1.35%. According to the central bank, the Australian economy has been solid so far thanks to commodity exports, the prices of which have been rising. Unemployment is 3.9%, the lowest level in 50 years.   One uncertainty is the behaviour of consumers, who are cutting back on spending in times of high inflation. A significant risk is global development, which is influenced by the war in Ukraine and its impact on energy and agricultural commodity prices.   Figure 5: The AUD/USD on H4 and daily chart The AUD/USD is in a downtrend and even the rate hike did not help the Australian dollar to strengthen. However, there has been some correction in the downtrend. The resistance according to the H4 chart is 0.6880 - 0.6900. The support is at 0.6760 - 0.6770.  
COT Week 27 Charts: Stock Market Speculators bets mostly lower led by S&P500 & MSCI EAFE Mini

COT Week 27 Charts: Stock Market Speculators bets mostly lower led by S&P500 & MSCI EAFE Mini

Invest Macro Invest Macro 09.07.2022 14:15
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The stock market speculator bets were mostly lower for a second straight week this week as three out of the eight stock markets we cover had higher positioning this week while five markets had lower contracts. Leading the gains for stock markets was the Nasdaq Mini (6,705 contracts) with the VIX (4,068 contracts) and Dow Jones Industrial Average Mini (1,990 contracts) also showing positive weeks. Meanwhile, leading the decreases in speculator bets this week were the S&P500 Mini (-44,456 contracts) and with MSCI EAFE Mini (-31,197 contracts), Russell 2000 Mini (-13,973 contracts), MSCI Emerging Markets Mini (-4,586 contracts) and the Nikkei 225 USD (-130 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Nasdaq Mini (92.3 percent) is at the highest level of the stock markets currently followed by the VIX (86.4 percent). Both are in extreme bullish levels compared to the past three years of speculator sentiment. On the lower end, the Russell 2000 Mini (0 percent) and the MSCI EAFE Mini (0 percent) are in bearish-extreme levels and at their lowest level of positioning of the past three years. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the S&P500 Mini (-43.1 percent) and MSCI EAFE Mini (-37.5 percent) are leading the down-trending scores over the past six weeks. The Nasdaq Mini, meanwhile, leads the trends to the upside with a 9.6 percent trend change. Data Snapshot of Stock Market Traders | Columns Legend Jul-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,309,241 8 -183,682 22 221,625 100 -37,943 18 Nikkei 225 14,508 11 -1,745 69 3,210 46 -1,465 10 Nasdaq-Mini 259,449 48 30,895 92 -25,919 11 -4,976 38 DowJones-Mini 67,437 24 -23,083 7 27,554 96 -4,471 15 VIX 266,933 17 -45,501 86 52,406 15 -6,905 58 Nikkei 225 Yen 60,276 44 3,916 46 25,226 88 -29,142 15   VIX Volatility Futures: The VIX Volatility large speculator standing this week came in at a net position of -45,501 contracts in the data reported through Tuesday. This was a weekly lift of 4,068 contracts from the previous week which had a total of -49,569 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 86.4 percent. The commercials are Bearish-Extreme with a score of 14.6 percent and the small traders (not shown in chart) are Bullish with a score of 57.9 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.2 54.0 8.8 – Percent of Open Interest Shorts: 34.3 34.4 11.4 – Net Position: -45,501 52,406 -6,905 – Gross Longs: 45,972 144,271 23,601 – Gross Shorts: 91,473 91,865 30,506 – Long to Short Ratio: 0.5 to 1 1.6 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 86.4 14.6 57.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.0 0.7 2.3   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week came in at a net position of -183,682 contracts in the data reported through Tuesday. This was a weekly reduction of -44,456 contracts from the previous week which had a total of -139,226 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.2 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.4 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 10.3 77.6 9.9 – Percent of Open Interest Shorts: 18.2 68.0 11.5 – Net Position: -183,682 221,625 -37,943 – Gross Longs: 237,370 1,791,046 227,663 – Gross Shorts: 421,052 1,569,421 265,606 – Long to Short Ratio: 0.6 to 1 1.1 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 22.2 100.0 18.4 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -43.1 42.5 -3.8   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week came in at a net position of -23,083 contracts in the data reported through Tuesday. This was a weekly advance of 1,990 contracts from the previous week which had a total of -25,073 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.1 percent. The commercials are Bullish-Extreme with a score of 96.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.5 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.4 67.4 15.3 – Percent of Open Interest Shorts: 50.6 26.5 22.0 – Net Position: -23,083 27,554 -4,471 – Gross Longs: 11,053 45,425 10,349 – Gross Shorts: 34,136 17,871 14,820 – Long to Short Ratio: 0.3 to 1 2.5 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 7.1 96.3 14.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.2 1.6 -12.2   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week came in at a net position of 30,895 contracts in the data reported through Tuesday. This was a weekly increase of 6,705 contracts from the previous week which had a total of 24,190 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 92.3 percent. The commercials are Bearish-Extreme with a score of 10.6 percent and the small traders (not shown in chart) are Bearish with a score of 38.3 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.2 52.9 13.6 – Percent of Open Interest Shorts: 20.3 62.9 15.6 – Net Position: 30,895 -25,919 -4,976 – Gross Longs: 83,514 137,186 35,380 – Gross Shorts: 52,619 163,105 40,356 – Long to Short Ratio: 1.6 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 92.3 10.6 38.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.6 -9.1 -4.8   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week came in at a net position of -118,593 contracts in the data reported through Tuesday. This was a weekly lowering of -13,973 contracts from the previous week which had a total of -104,620 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.3 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 7.2 88.2 3.4 – Percent of Open Interest Shorts: 27.4 67.1 4.2 – Net Position: -118,593 123,533 -4,940 – Gross Longs: 42,435 517,591 19,684 – Gross Shorts: 161,028 394,058 24,624 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 12.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -24.8 24.2 -7.5   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week came in at a net position of -1,745 contracts in the data reported through Tuesday. This was a weekly fall of -130 contracts from the previous week which had a total of -1,615 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.2 percent. The commercials are Bearish with a score of 45.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.9 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.4 55.8 15.5 – Percent of Open Interest Shorts: 40.4 33.7 25.6 – Net Position: -1,745 3,210 -1,465 – Gross Longs: 4,119 8,101 2,250 – Gross Shorts: 5,864 4,891 3,715 – Long to Short Ratio: 0.7 to 1 1.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.2 45.7 9.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.1 0.2 2.3   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week came in at a net position of -33,183 contracts in the data reported through Tuesday. This was a weekly decrease of -31,197 contracts from the previous week which had a total of -1,986 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.2 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.1 90.6 3.8 – Percent of Open Interest Shorts: 12.9 84.8 1.8 – Net Position: -33,183 24,926 8,257 – Gross Longs: 21,492 384,305 15,954 – Gross Shorts: 54,675 359,379 7,697 – Long to Short Ratio: 0.4 to 1 1.1 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 91.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -37.5 33.7 41.4   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 27 Charts: Energy Speculator bets drop led by WTI Crude Oil & Gasoline

COT Week 27 Charts: Energy Speculator bets drop led by WTI Crude Oil & Gasoline

Invest Macro Invest Macro 09.07.2022 15:11
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were lower this week as just one out of the six energy markets we cover had higher positioning this week while the other five markets had lower contracts. The only market to show speculator bet gains for energy markets was Brent Crude Oil with a gain of +4,163 contracts. Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-19,169 contracts) and Gasoline (-4,078 contracts) with Natural Gas (-1,100 contracts), Heating Oil (-1,022 contracts) and the Bloomberg Commodity Index (-137 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that the Bloomberg Commodity Index (78.8 percent) is above its midpoint for the past 3 years and leads the way for the energy markets in speculator sentiment. Brent oil (46.5 percent) and Heating oil (52 percent) are also positive while WTI Crude (0 percent) and Gasoline (0 percent) are at the bottom of their 3-year ranges and in bearish extreme levels. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Heating oil (18.7 percent) and the Bloomberg Commodity Index (7.8 percent) lead the rising scores over the past six weeks. WTI Crude oil, meanwhile, has been on the largest downtrend with a -17.6 percent score for the past six weeks, followed by Natural Gas (-5.7 percent) and Gasoline (-4.4 percent). Data Snapshot of Commodity Market Traders | Columns Legend Jul-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,637,862 0 280,523 0 -304,217 100 23,694 48 Gold 498,210 13 145,660 0 -165,585 100 19,925 0 Silver 140,463 7 5,139 0 -11,622 100 6,483 0 Copper 183,331 15 -31,796 19 31,340 81 456 28 Palladium 7,373 5 -3,410 4 4,104 98 -694 4 Platinum 72,895 44 -2,734 0 -1,670 100 4,404 23 Natural Gas 977,507 0 -130,519 39 91,950 60 38,569 71 Brent 166,711 13 -38,514 47 37,309 55 1,205 26 Heating Oil 264,269 21 6,486 52 -22,775 47 16,289 55 Soybeans 638,675 7 125,491 52 -93,638 56 -31,853 17 Corn 1,331,035 0 260,705 63 -207,441 42 -53,264 12 Coffee 193,731 1 46,787 79 -49,139 25 2,352 14 Sugar 713,245 0 83,512 54 -85,255 52 1,743 10 Wheat 288,754 0 8,384 30 623 61 -9,007 64   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week equaled a net position of 280,523 contracts in the data reported through Tuesday. This was a weekly reduction of -19,169 contracts from the previous week which had a total of 299,692 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 48.4 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.1 36.8 5.0 – Percent of Open Interest Shorts: 7.0 55.3 3.5 – Net Position: 280,523 -304,217 23,694 – Gross Longs: 394,943 601,996 81,558 – Gross Shorts: 114,420 906,213 57,864 – Long to Short Ratio: 3.5 to 1 0.7 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 48.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -17.6 23.1 -22.8   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week equaled a net position of -38,514 contracts in the data reported through Tuesday. This was a weekly lift of 4,163 contracts from the previous week which had a total of -42,677 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.5 percent. The commercials are Bullish with a score of 55.3 percent and the small traders (not shown in chart) are Bearish with a score of 25.5 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.4 52.4 4.1 – Percent of Open Interest Shorts: 38.5 30.0 3.4 – Net Position: -38,514 37,309 1,205 – Gross Longs: 25,605 87,320 6,881 – Gross Shorts: 64,119 50,011 5,676 – Long to Short Ratio: 0.4 to 1 1.7 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 46.5 55.3 25.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.3 -0.3 -8.1   Natural Gas Futures: The Natural Gas Futures large speculator standing this week equaled a net position of -130,519 contracts in the data reported through Tuesday. This was a weekly decline of -1,100 contracts from the previous week which had a total of -129,419 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.4 percent. The commercials are Bullish with a score of 59.9 percent and the small traders (not shown in chart) are Bullish with a score of 71.4 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.2 40.6 6.8 – Percent of Open Interest Shorts: 33.6 31.2 2.8 – Net Position: -130,519 91,950 38,569 – Gross Longs: 197,937 397,060 66,331 – Gross Shorts: 328,456 305,110 27,762 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.4 59.9 71.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.7 8.9 -21.6   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week equaled a net position of 28,021 contracts in the data reported through Tuesday. This was a weekly decrease of -4,078 contracts from the previous week which had a total of 32,099 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 43.9 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.9 52.7 7.5 – Percent of Open Interest Shorts: 16.6 64.7 5.7 – Net Position: 28,021 -32,693 4,672 – Gross Longs: 72,955 142,761 20,221 – Gross Shorts: 44,934 175,454 15,549 – Long to Short Ratio: 1.6 to 1 0.8 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 43.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.4 10.5 -43.3   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week equaled a net position of 6,486 contracts in the data reported through Tuesday. This was a weekly fall of -1,022 contracts from the previous week which had a total of 7,508 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.0 percent. The commercials are Bearish with a score of 47.0 percent and the small traders (not shown in chart) are Bullish with a score of 54.8 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.0 52.7 16.0 – Percent of Open Interest Shorts: 12.5 61.3 9.9 – Net Position: 6,486 -22,775 16,289 – Gross Longs: 39,513 139,296 42,410 – Gross Shorts: 33,027 162,071 26,121 – Long to Short Ratio: 1.2 to 1 0.9 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 52.0 47.0 54.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 18.7 -12.3 -3.9   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week equaled a net position of -7,486 contracts in the data reported through Tuesday. This was a weekly lowering of -137 contracts from the previous week which had a total of -7,349 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 78.8 percent. The commercials are Bearish with a score of 21.1 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.1 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.4 66.8 0.5 – Percent of Open Interest Shorts: 38.4 56.1 0.2 – Net Position: -7,486 7,242 244 – Gross Longs: 18,524 45,230 367 – Gross Shorts: 26,010 37,988 123 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 78.8 21.1 19.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.8 -6.8 -10.4   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 28 Charts: Energy Speculator bets mixed led by Gasoline & Heating Oil

COT Week 28 Charts: Energy Speculator bets mixed led by Gasoline & Heating Oil

Invest Macro Invest Macro 16.07.2022 15:58
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning while the other three markets saw decreasing net positions for the week. Leading the gains for energy markets was Gasoline (4,721 contracts) with Heating Oil (242 contracts) and Brent Crude Oil (126 contracts) also showing very small positive weeks. Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-12,195 contracts) and the Bloomberg Commodity Index (-3,229 contracts) with Natural Gas (-1,084 contracts) also registering lower bets on the week.   Data Snapshot of Commodity Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,612,803 0 268,328 0 -294,526 100 26,198 52 Gold 542,493 26 118,121 0 -137,788 100 19,667 0 Silver 142,259 9 3,204 0 -9,612 100 6,408 0 Copper 172,037 6 -26,295 23 27,061 78 -766 21 Palladium 6,474 1 -2,802 7 3,252 93 -450 18 Platinum 75,615 48 -5,911 0 1,235 100 4,676 27 Natural Gas 969,204 0 -131,603 39 94,195 61 37,408 69 Brent 171,950 17 -38,388 47 36,619 54 1,769 33 Heating Oil 266,330 22 6,728 52 -22,853 47 16,125 54 Soybeans 611,751 1 115,119 49 -87,284 57 -27,835 24 Corn 1,333,199 0 247,156 62 -196,533 44 -50,623 14 Coffee 195,810 2 34,308 68 -35,166 37 858 0 Sugar 701,144 0 105,869 58 -115,779 46 9,910 20 Wheat 288,182 0 4,639 25 5,041 67 -9,680 60   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index (66.5 percent) and Heating Oil (52.3 percent) lead the energy markets this week. The Bloomberg Commodity Index has been the strongest strength score in the past few weeks but came down from a 78.8 percent score last week showing a weakening strength compared to the 3-year range. On the downside, WTI Crude Oil (0.0 percent) and Gasoline (4.7 percent) come in as the lowest strength scores currently and are both in bearish extreme levels (near the bottom of their 3-year ranges). Strength Statistics: WTI Crude Oil (0.0 percent) vs WTI Crude Oil previous week (3.8 percent) Brent Crude Oil (46.8 percent) vs Brent Crude Oil previous week (46.5 percent) Natural Gas (39.1 percent) vs Natural Gas previous week (39.4 percent) Gasoline (4.7 percent) vs Gasoline previous week (0.0 percent) Heating Oil (52.3 percent) vs Heating Oil previous week (52.0 percent) Bloomberg Commodity Index (66.5 percent) vs Bloomberg Commodity Index previous week (78.8 percent) Strength Trends Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that Heating Oil (9.7 percent) leads the past six weeks trends for energy this week. Brent Crude Oil (4.2 percent) is the only positive mover in the latest trends data. WTI Crude Oil (-20.1 percent) leads the downside trend scores currently while the next market with lower trend scores was Natural Gas (-6.4 percent) followed by Gasoline (-1.0 percent). Strength Trend Statistics: WTI Crude Oil (-20.1 percent) vs WTI Crude Oil previous week (-16.9 percent) Brent Crude Oil (4.2 percent) vs Brent Crude Oil previous week (1.3 percent) Natural Gas (-6.4 percent) vs Natural Gas previous week (-5.7 percent) Gasoline (-1.0 percent) vs Gasoline previous week (-4.4 percent) Heating Oil (9.7 percent) vs Heating Oil previous week (18.7 percent) Bloomberg Commodity Index (-0.6 percent) vs Bloomberg Commodity Index previous week (7.8 percent) Individual Markets: WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week resulted in a net position of 268,328 contracts in the data reported through Tuesday. This was a weekly fall of -12,195 contracts from the previous week which had a total of 280,523 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 51.9 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.3 36.6 5.1 – Percent of Open Interest Shorts: 6.6 54.9 3.5 – Net Position: 268,328 -294,526 26,198 – Gross Longs: 375,155 590,438 82,523 – Gross Shorts: 106,827 884,964 56,325 – Long to Short Ratio: 3.5 to 1 0.7 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 51.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -20.1 25.2 -20.6   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week resulted in a net position of -38,388 contracts in the data reported through Tuesday. This was a weekly rise of 126 contracts from the previous week which had a total of -38,514 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.8 percent. The commercials are Bullish with a score of 54.2 percent and the small traders (not shown in chart) are Bearish with a score of 33.1 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.6 52.2 4.1 – Percent of Open Interest Shorts: 38.0 30.9 3.1 – Net Position: -38,388 36,619 1,769 – Gross Longs: 26,868 89,831 7,060 – Gross Shorts: 65,256 53,212 5,291 – Long to Short Ratio: 0.4 to 1 1.7 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 46.8 54.2 33.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.2 -3.9 -2.2   Natural Gas Futures: The Natural Gas Futures large speculator standing this week resulted in a net position of -131,603 contracts in the data reported through Tuesday. This was a weekly lowering of -1,084 contracts from the previous week which had a total of -130,519 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.1 percent. The commercials are Bullish with a score of 60.6 percent and the small traders (not shown in chart) are Bullish with a score of 68.7 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.9 41.2 6.8 – Percent of Open Interest Shorts: 32.5 31.4 2.9 – Net Position: -131,603 94,195 37,408 – Gross Longs: 183,194 398,833 65,940 – Gross Shorts: 314,797 304,638 28,532 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.1 60.6 68.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.4 10.9 -31.3   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week resulted in a net position of 32,742 contracts in the data reported through Tuesday. This was a weekly increase of 4,721 contracts from the previous week which had a total of 28,021 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.7 percent. The commercials are Bullish-Extreme with a score of 94.0 percent and the small traders (not shown in chart) are Bullish with a score of 54.1 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.1 55.1 7.3 – Percent of Open Interest Shorts: 13.4 69.2 5.1 – Net Position: 32,742 -38,954 6,212 – Gross Longs: 69,876 153,217 20,335 – Gross Shorts: 37,134 192,171 14,123 – Long to Short Ratio: 1.9 to 1 0.8 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.7 94.0 54.1 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.0 6.8 -40.8   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week resulted in a net position of 6,728 contracts in the data reported through Tuesday. This was a weekly increase of 242 contracts from the previous week which had a total of 6,486 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.3 percent. The commercials are Bearish with a score of 46.9 percent and the small traders (not shown in chart) are Bullish with a score of 54.2 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.8 52.7 16.1 – Percent of Open Interest Shorts: 11.3 61.3 10.1 – Net Position: 6,728 -22,853 16,125 – Gross Longs: 36,724 140,444 43,002 – Gross Shorts: 29,996 163,297 26,877 – Long to Short Ratio: 1.2 to 1 0.9 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 52.3 46.9 54.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.7 -5.2 -6.0   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week resulted in a net position of -10,715 contracts in the data reported through Tuesday. This was a weekly lowering of -3,229 contracts from the previous week which had a total of -7,486 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.5 percent. The commercials are Bearish with a score of 33.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.7 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.4 72.9 0.5 – Percent of Open Interest Shorts: 39.5 57.1 0.2 – Net Position: -10,715 10,480 235 – Gross Longs: 15,577 48,468 360 – Gross Shorts: 26,292 37,988 125 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 66.5 33.6 18.7 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -0.6 1.7 -12.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
What Does Inflation Rates We Got To Know Mean To Central Banks?

What Does Inflation Rates We Got To Know Mean To Central Banks?

Purple Trading Purple Trading 15.07.2022 13:36
The Swing Overview – Week 28 2022 This week's new record inflation readings sent a clear message to central bankers. Further interest rate hikes must be faster than before. The first of the big banks to take this challenge seriously was the Bank of Canada, which literally shocked the markets with an unprecedented rate hike of a full 1%. This is obviously not good for stocks, which weakened again in the past week. The euro also stumbled and has already fallen below parity with the usd. Uncertainty, on the other hand, favours the US dollar, which has reached new record highs.   Macroeconomic data The data from the US labour market, the so-called NFP, beat expectations, as the US economy created 372 thousand new jobs in June (the expectation was 268 thousand) and the unemployment rate remained at 3.6%. But on the other hand, unemployment claims continued to rise, reaching 244k last week, the 7th week in a row of increase.   But the crucial news was the inflation data for June. It exceeded expectations and reached a new record of 9.1% on year-on-year basis, the highest value since 1981. Inflation rose by 1.3% on month-on-month basis. Energy prices, which rose by 41.6%, had a major impact on inflation. Declines in commodity prices, such as oil, have not yet influenced June inflation, which may be some positive news. Core inflation excluding food and energy prices rose by 5.9%, down from 6% in May.   The value of inflation was a shock to the markets and the dollar strengthened sharply. We can see this in the dollar index, which has already surpassed 109. We will see how the Fed, which will be deciding on interest rates in less than two weeks, will react to this development. A rate hike of 0.75% is very likely and the question is whether even such an increase will be enough for the markets. Meanwhile, there has been an inversion on the yield curve on US bonds. This means that yields on 2-year bonds are higher than those on 10-year bonds. This is one of the signals of a recession. Figure 1: The US Treasury yield curve on the monthly chart and the USD index on the daily chart   The SP 500 Index Apart from macroeconomic indicators, the ongoing earnings season will also influence the performance of the indices this month. Among the major banks, JP Morgan and Morgan Stanley reported results this week. Both banks reported earnings, but they were below investor expectations. The impact of more expensive funding sources that banks need to finance their activities is probably starting to show.   We must also be interested in the data in China, which, due to the size of the Chinese economy, has an impact on the movement of global indices. 2Q GDP in China was 0.4% on year-on-year basis, a significant drop from the previous quarter (4.8%). Strict lockdowns against new COVID-19 outbreaks had an impact on economic situation in the country. Figure 2: SP 500 on H4 and D1 chart The threat of a recession is seeping into the SP 500 index with another decline, which stalled last week at the support level, which according to the H4 is in the 3,740-3,750 range. The next support is 3,640 - 3,670.  The nearest resistance is 3,930 - 3,950. German DAX index The German ZEW sentiment, which shows expectations for the next 6 months, reached - 53.8. This is the lowest reading since 2011. Inflation in Germany reached 7.6% in June. This is lower than the previous month when inflation was 7.9%. Concerns about the global recession continue to affect the DAX index, which has tested significant supports. Figure 3: German DAX index on H4 and daily chart Strong support according to the daily chart is 12,443 - 12,500, which was tested again last week. We can take the moving averages EMA 50 and SMA 100 as a resistance. The nearest horizontal resistance is 12,950 - 13,000.   The euro broke parity with the dollar The euro fell below 1.00 on the pair with the dollar for the first time in 20 years, reaching a low of 0.9950 last week. Although the euro eventually closed above parity, so from a technical perspective it is not a valid break yet, the euro's weakening points to the headwinds the eurozone is facing: high inflation, weak growth, the threat in energy commodity supplies, the war in Ukraine. Figure 4: EUR/USD on H4 and daily chart Next week the ECB will be deciding on interest rates and it is obvious that there will be some rate hike. A modest increase of 0.25% has been announced. Taking into account the issues mentioned above, the motivation for the ECB to raise rates by a more significant step will not be very strong. The euro therefore remains under pressure and it is not impossible that a fall below parity will occur again in the near future.   The nearest resistance according to the H4 chart is at 1.008 - 1.012. A support is the last low, which is at 0.9950 - 0.9960.   Bank of Canada has pulled out the anti-inflation bazooka Analysts had expected the Bank of Canada to raise rates by 0.75%. Instead, the central bank shocked markets with an unprecedented increase by a full 1%, the highest rate hike in 24 years. The central bank did so in response to inflation, which is the highest in Canada in 40 years. With this jump in rates, the bank is trying to prevent uncontrolled price increases.   The reaction of the Canadian dollar has been interesting. It strengthened significantly immediately after the announcement. However, then it began to weaken sharply. This may be because investors now expect the US Fed to resort to a similarly sharp rate hike. Figure 5: USD/CAD on H4 and daily chart Another reason may be the decline in oil prices, which the Canadian dollar is correlated with, as Canada is a major oil producer. The oil is weakening due to fears of a drop in demand that would accompany an economic recession. Figure 6: Oil on the H4 and daily charts Oil is currently in a downtrend. However, it has reached a support value, which is in the area near $94 per barrel. The support has already been broken, but on the daily chart oil closed above this value. Therefore, it is not a valid break yet.  
Which stock market sector is currently interesting due to its volatility?

Which stock market sector is currently interesting due to its volatility?

Purple Trading Purple Trading 18.07.2022 07:57
Which stock market sector is currently interesting due to its volatility While long-term investors in physical shares are not too interested in volatility, CFD traders can make potentially very nice profits from it. However, equity markets are vast and it can happen that an interesting title slips through one’s fingers. This article will make sure that it doesn't happen. What is volatility and how is it created If you were to equate the words volatility and nervousness (or moodiness) you would not be far off the mark. Indeed, volatility is really a measure of nervousness in the markets and where there is nervousness, there is also uncertainty. Uncertainty in the markets can arise for many different reasons, but it usually happens before the release of important macroeconomic news (on our economic calendar), you can identify those by the three bulls' heads symbols) or during unexpected events with a major impact on a particular market sector or the geopolitical order of the world (natural disasters, wars).   On the charts of trading platforms, you can recognize a highly volatile market by the dynamically changing price of the instrument, the market is said to be going up or down, and if you switch to a candle chart, you may notice large candles. Conversely, non-volatile, calm markets move sideways without any significant dips or rises. Volatility can also be historical or implied, but we'll write about that another time. Now, let’s talk about how can one potentially profit from volatility and where to find suitable markets to do so.   How to potentially profit from volatility For intraday and swing traders, volatility is the key to their potential success. For traders, often the worst situation is the so-called "sideways" market movement, where the asset in question goes "sideways" without significant movements either up or down. With small and larger price fluctuations, traders can potentially generate interesting profits. One of the most volatile markets is the stock market, where some news can trigger very significant price movements. Events such as important economic reports, a stock split, or an acquisition announcement, for example, can move the price of a given stock. In addition, traders using CFDs for share trading can also use leverage to multiply any gains (and losses) in a given volatility.   The key to potential success is choosing the right stock titles. Some stocks and sectors can be considered more volatile, while others can go longer periods of time without significant fluctuations. So how do you look for volatility? Several indicators measure price movements in stocks, perhaps the most well-known is beta, which measures the volatility of a given stock compared to a benchmark stock index (typically the S&P 500 for US stocks). The beta indicator is listed on most well-known stock sites, but we can calculate it using the following formula: Beta = 1 In this case, the stock is highly correlated with the market and we can expect very similar movements to the benchmark index.   Beta < 1 If the beta is less than 1, we can consider the stock to be potentially less volatile than the stock market.   Beta > 1 Stocks with a beta greater than 1 are theoretically more volatile than the benchmark index. So, for example, if a stock's beta is 1.1, we think of it as 10% more volatile. It is stock titles with a beta above 1 that should be of most interest to investors looking to take advantage of volatility. However, it is not enough to monitor the beta alone, traders should not forget to monitor important news and fundamentals related to the company and the market in general. Thus, it is advisable to choose a few companies whose stocks have been significantly volatile in the past and where we expect strong movements due to positive and negative news to continue. So which sectors may be worth following? In which sectors can you potentially benefit from high volatility? Energy sector The energy companies sector has historically been one of the most volatile, as confirmed by the course of 2022 so far. The price development of energy companies is of course strongly linked to the price of energy commodities. These have had a great year - both natural gas and oil have appreciated by several tens of percent since the beginning of the year. However, this growth has not been without significant fluctuations, often by higher units of percent per day. The current geopolitical situation and growing talk of recession promise to continue the volatility in the sector. In the chart below, you can see the movement of Exxon Mobil Corp shares in recent weeks. Chart 1: Exxon Mobil shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Travel industry Shares of companies related to the travel industry have always been very volatile. According to data from the beginning of the year (NYU Stern), even the companies classified as hotels and casinos were the most volatile when measured by beta. Given the coronavirus pandemic, this is not surprising. However, the threat of coronavirus still persists and there is currently the talk of another wave. However, global demand for travel is once again strong. Airlines and hotels are beginning to recover from the previous two dry years. As a result, both positive and negative news promises potential volatility going forward. In the chart below, you can see the movement of Hilton Hotels Corp shares in recent weeks. Chart 2: Hilton Hotels shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Technology Technology is a very broad term - some companies in a given sector can be considered "blue chip" stocks, which can generally be less volatile and have the potential to appreciate nicely over time. These include Apple or Microsoft, for example. However, even these will not escape relatively high volatility in 2022. Traders looking for even stronger moves, however, will be more interested in smaller companies such as Uber, Zoom Technologies, Palantir, or PayPal. In the chart below, we can see the evolution of Twitter stock, which has undergone significant volatility in recent weeks. This was linked to the announcement of the acquisition (April gap) and its recent recall by Elon Musk. With both opposing parties facing a court battle, similarly wild news is just more water on the volatility mill. Chart 3: Twitter shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages There are, of course, more sectors that are significantly volatile. Traders can follow companies in the healthcare sector, for example, where coronavirus vaccine companies are among the most interesting ones. Restaurants or aerospace and chemical companies can also be worth looking at. But few things can move stock markets as significantly as the economic cycle. We'll look at the impact of expansion and recession on stocks in our next article.  
Siemens Gained 27% But Announced Its First Loss Since 2010. What Are The Causes?

Siemens Gained 27% But Announced Its First Loss Since 2010. What Are The Causes?

Conotoxia Comments Conotoxia Comments 12.08.2022 10:00
Germany's Siemens, a manufacturer of technology to automate and digitalise businesses and households by supplying hydraulic, electrical and electronic equipment and household appliances, today reported revenue growth of 27% (year-on-year) and 1% growth between quarters. What happened? This exceeded analysts' expectations of €17.47 billion, reaching €17.87 billion in Q3 (the financial year starts earlier than the calendar year). This growth was mainly attributed to an increase in orders from the areas of business automation and intelligent infrastructure.   "Demand in the European capital goods sector is holding up," commented Barclays last week, following the publication of results from other companies in the sector, such as ABB and Schneider Electric. This was also confirmed by CEO Roland Busch, who said that demand remained strong in the quarter despite an environment affected by sanctions on Russia, high inflation and the ongoing effects of a pandemic. However, it is worth noting that these companies typically operate on long-term contracts and the decline in demand can be noticed after a long delay.    Siemens has a strongly diversified business, not only in terms of products but also in respect of the countries of origin of its customers. However, this may not protect it from the looming recession, which seems to be a problem not only for Europe or the US but for the whole world.    Alarming are, for example, the data of the German manufacturing PMI (Purchasing Managers' Index), which measures the assessment of the economic situation by managers. This index is currently at almost its lowest level in two years. The results in other countries in Europe and America also look similar. Asian economies also appear to be weakening.   Siemens also incurred a net loss of €1.66 billion charge for the write-down of the value of its stake in Siemens Energy, which operated in Russia. In addition, the company estimates that it has incurred additional losses of €0.6 billion due to the actions of the Russian Federation.   Despite high energy prices, Siemens is struggling to make savings from its 35% stake in the turbine and wind energy company. It has had a difficult two years since the spin-off in 2020, with operational problems and losses in the Siemens Gamesa wind turbine division.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service)   Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Siemens posted its first loss since 2010, yet shares are gaining
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

Japanese Yen (JPY) Rise. Energy Prices Are Finally Falling!?

John Hardy John Hardy 16.08.2022 10:05
Summary:  Weak data out of China overnight, together with a surprise rate cut from the PBOC and collapsing energy prices later on Monday saw the Japanese yen surging higher across the board. Indeed, the two key factors behind its descent to multi-decade lows earlier this year, rising yields and surging energy prices, have eased considerably since mid-June with only modest reaction from the yen thus far. Is that about to change? FX Trading focus: JPY finding sudden support on new disinflation narrative Weaker than expected Chinese data overnight brought a surprise rate cut from the Chinese central bank and seems to have sparked a broadening sell-off in commodities, which was boosted later by a crude oil drop of some five dollars per barrel on the news that Iran will decide by midnight tonight on whether to accept a new draft on the nuclear deal forward by the Euro zone. In response, the Chinese yuan has weakened toward the highs for the cycle in USDCNH, trading 6.78+ as of this writing and  (there was a spike high to 6.381 back in May but the exchange rate has been capped by 6.80 since then), but the Japanese yen is stealing the volatility and strength crown, surging sharply across the board and following up on the move lower inspired by the soft US CPI data point. US long yields easing considerably lower after an odd spike last Thursday are a further wind at the JPY’s back here. In the bigger picture, it has been rather remarkable that the firm retreat in global long-date yields since the mid-June peak and the oil price backing down a full 25% and more from the cycle highs didn’t do more to support the yen from the yield-spread angle (Bank of Japan’s YCC policy less toxic as yields fall) and from the current account angle for Japan. Interestingly, while the JPY has surged and taken USDJPY down several notches, the US dollar is rather firm elsewhere, with the focus more on selling pro-cyclical and commodity currencies on the possible implication that China may be content to export deflation by weakening its currency now that commodity prices have come down rather than on selling the US dollar due to any marking down of Fed expectations. Still, while the USD may remain a safe haven should JPY volatility be set to run amok across markets, the focus is far more on the latter as long as USDJPY is falling Chart: EURJPY As the JPY surges here, EURJPY is falling sharply again, largely tracking the trajectory of longer European sovereign yields, which never really rose much from their recent lows from a couple of weeks back, making it tough to understand the solid rally back above 138.00 of late. After peaking above 1.90% briefly in June, the German 10-year Bund, for example, is trading about 100 basis points lower and is not far from the cycle low daily close at 77 basis points. The EURJPY chart features a rather significant pivot area at 133.50, a prior major high back in late 2021 and the recent low and 200-day moving average back at the beginning of the month. After a brief JPY volatility scare in late July and into early August that faded, are we set for a second and bigger round here that takes USDJPY down through 130.00 and EURJPY likewise? A more significant rally in long US treasuries might be required to bring about a real JPY rampage. Source: Saxo Group The focus on weak Chinese data and key commodity prices like copper suddenly losing altitude after their recent rally has the Aussie shifting to the defensive just after it was showing strength late last week in sympathy with strong risk sentiment and those higher commodity prices. Is the AUDUSD break above 0.7000-25 set for a high octane reversal here? AUDJPY is worth a look as well after it managed to surge all the way back toward the top of the range before. The idea that a weak Chine might export deflation from here might be unsettling for Aussie bulls. The US macro data focus for the week is on today’s NAHB homebuilder’s survey, which plunged to a low since 2015 in June (not including the chaotic early 2020 pandemic breakout months), the July Housing Starts and Building Permits and then the July Retail Sales and FOMC minutes on Wednesday. With a massive relief in gasoline prices from the July spike high, it will be interesting to see whether the August US data picks up again on the services side. The preliminary August University of Michigan sentiment survey release on Friday showed expectations rising sharply by over 7 points from the lowest since-1980 lows of June, while the Present Situation measure dropped a few points back toward the cycle (and record) lows from May. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is the real story today, but as our trending measures employ some averaging/smoothing, the move will need to stick what it has achieved today to show more. Watch out for a big shift in the commodity currencies in coming days as well if today’s move is the start of something. Elsewhere, the JPY comeback is merely taking CHF from strength to strength, although even the might franc has dropped against the JPY today. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Big momentum shift afoot today and watching whether this holds and the JPY pairs and pairs like AUDUSD and USDCAD to see if we are witnessing a major momentum shift in themes here. Also note NOK pairs like USDNOK and EURNOK here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Aug. NAHB Housing Market Index 0130 – Australia RBA Meeting Minutes Source: FX Update: JPY jumps on deflating energy prices, fresh retreat in yields.
The Euro To US Dollar Instrument Did Not Change In Value

The Peak Of Inflation May Be Yet To Come? ECB Takes Steps

Conotoxia Comments Conotoxia Comments 19.08.2022 12:38
Inflation in the Eurozone appears to be rising steadily, which may be influenced by the rising cost of electricity and energy carriers. Today's release of producer prices in Germany suggests that the peak of inflation in the Eurozone may be yet to come. Germany is the eurozone's largest economy, so published readings for that economy could heavily influence data for the community as a whole. Energy for businesses rose by 105 percent. Today we learned that in July producer prices (PPI inflation) rose in Germany at the fastest pace on record. PPI inflation on an annualized basis was as high as 37.2 percent. A month earlier, price growth stood at 32.7 percent, while the market consensus was for inflation of 32 percent. Energy prices still seem to remain the main driver of producer costs. The cost of the aforementioned energy for businesses rose 105 percent compared to July 2021. Had it not been for this factor, producer prices could have risen much more slowly, by only 14.6 percent. - according to the published data. Entrepreneurs could translate such a significant increase in costs into their products, which could also raise consumer CPI inflation as a result. Hence, it is not impossible that a possible peak in inflation in the eurozone is yet to come. It could fall in the last quarter of this year, or early next year, assuming that energy prices begin to stabilize or fall. Otherwise, the eurozone economy could plunge into a deep crisis. EUR/USD near parity again The rate of the EUR/USD pair fell today to 1.0084 (yesterday it was around 1.0200) and again approached parity at 1.0000. Concerns about the eurozone economy may be reflected in the exchange rate. However, it seems that the reaction to negative data is becoming less and less, as if the market has to some extent already discounted some of the bad news that may come in the near future. The European Central Bank's forthcoming actions may put the brakes on the euro's sell-off. According to the interest rate market, the ECB may opt for two rate hikes of 50 basis points each this fall. The market assumes that the ECB will raise the main interest rate to 1.5 percent throughout the cycle. Unlike the Fed, which may reduce the pace of hikes at the end of the year, the ECB may only move with a rapid increase in interest rates. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: PPI inflation in Germany highest on record. Euro under pressure
Investors Are Exposing Themselves To Global Energy Crisis!

Covid Vaccine Caused The World Of Business To Come Back From The Dead, The History Repeats Itself

Peter Garnry Peter Garnry 19.08.2022 16:42
 Summary:  The world and the global equity market can be divided into two parts; the tangible and the intangible. Since 2008 the tangibles driven industry groups have severely underperformed the intangibles driven industry groups due falling interest rates and an explosion in profits by companies utilising a lot of intangibles in their business model. However, since the Covid vaccine was announced the world came roaring back causing demand to outstrip supply and thus fueling inflation. The lack of supply of physical goods in the world and deglobalisation will be a theme going forward and our bet is that the tangible world will stage a comeback against the intangible world. The Great Financial Crisis proved to be the end of the tangible world The SaxoStrats team has been talking a lot about how intangibles took over the world and now the time has come for the tangible world to win back some terrain as years of underinvestment has created enormous supply deficits in energy, food, metals, construction materials etc. We have finally created two indices capturing the market performance of intangibles and tangibles driven industry groups. These indices will make it easier to observe performance in these two parts of the economy and will enable us to quantify whether our “tangibles are coming back” thesis is correct. When we look at intangibles vs tangibles over the period 1998-2022 it is clear we two distinct periods. From 1998-2008 the tangible part of the economy delivered the best total return to investors driven by a booming financial sector, rising real estate prices, and a commodities super cycle. Since 2008, the separation of the two parts of the economy becomes very clear. Lower and lower interest rates are inflating equity valuations of growth assets and intangibles driven industry groups are seeing an unprecedented acceleration in profits due to software business models maturing and e-commerce penetrating all consumer markets fueling the outperformance. If we look at the relative performance the tangible world peaked in April 2008 and was more or less in a continuous decline relative to the intangible world until October 2020. In November 2020, the revelation of the Covid vaccine reopened the economy so fast that demand come roaring back to a degree in which the physical supply of goods could not keep up. Prices began to accelerate causing the current run-away inflation and headache for central banks. The tangible world has since done better relative to intangibles and if we are right in our main theme of an ongoing energy and food crisis combined a multi-decade long deglobalisation then tangibles should continue to do well. Intangibles are still ahead despite rising interest and the current energy crisis During the pandemic the intangibles driven industry groups did better than the physical world because the whole world went into lockdown. Intangibles driven industries were suddenly necessary for making the world go around when we could not operate in the physical world. Government stimulated the economy in extraordinary amounts across monetary and fiscal measures and the demand outcome from this stimulus has caused global demand to outstrip available supply and especially of things in the physical world. The outcome of this has been inflation and also a comeback to the tangible world, but the tangibles driven industry groups are still behind the intangibles measured from the starting point of December 2019. It is our expectations that as interest rates are lifted to cool demand and inflation in the short-term the tangible world will gain more relative to intangibles. What has been the best performing industry group since 1998? One thing is to look at the aggregated indices of the tangibles and intangibles driven industry group, but another interesting observation is to look at the best performing industry. There were three close industry groups, but by a small amount the performing industry group has actually been the retailing industry. The industry group was not creating a lot of shareholder value until after the Great Financial Crisis when the e-commerce, automation, and digitalization combined with expansion of manufacturing in China lifted profitability and market value of retailing companies. The largest retailing companies in the industry group today are Amazon.com, Home Depot, Alibaba, Lowe’s, Meituan, and JD.com. Our definition of tangible and intangible industry groups Tangible assets are loosely defined as physical assets one can touch and feel, and which can be collateralised for loans. This definition is too broad and not meaningful, because in the consumer services industry group, which we have defined as driven by intangibles, you find companies such as Starbucks and McDonald’s which both employ a lot of physical assets in their business. The way we have defined intangibles and tangibles driven industry groups was going back to 1998 and calculate the market value to assets for all the active companies at that point in time. We need calculated the average ratio for each of the 24 industry groups. All the industry groups with a ratio above the average of all groups we put into the intangibles. If the market value is substantially above the book value of assets on the balance sheet it must mean that the market is putting a value on something that is not there, or at least in accounting terms, and this is clearly the intangibles. So for McDonald’s they do employ a lot of physical assets but it is the branding, store network, product etc. that derives the meaningful value creation and thus the market is valuing the company way above the book value of its assets. One could argue that McDonald’s is a hybrid company but for our purposes we define it as being mostly intangibles driven. The full list is presented below. Banks are interesting because many think they are driven by intangibles because it employs a lot of people, but the thing is that banks are essentially deriving their profits from the spread between loans and deposits. The majority of bank loans are tied to physical assets and thus banks are tightly connected to the physical world. Tangibles driven industry groups Automobiles & Components Banks Capital Goods Commercial & Professional Services Consumer Durables & Apparel Diversified Financials Energy Food & Staples Retailing Insurance Materials Real Estate Telecommunication Services Transportation Utilities Intangibles driven industry groups Consumer Services Food, Beverage & Tobacco Health Care Equipment & Services Household & Personal Products Media & Entertainment Pharmaceuticals, Biotechnology & Life Sciences Retailing Semiconductors & Semiconductor Equipment Software & Services Technology Hardware & Equipment Source: The tangible world is fighting back
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

Governments Are Looking Into Ways To Mitigate The Impact Of Higher Energy Prices

ING Economics ING Economics 03.09.2022 08:55
  It is no secret that Europe is heading for a severe energy crisis. Energy prices have already skyrocketed but companies and households will only be confronted with higher energy bills in the coming months. While rising bills are inevitable, the other big risk for Europe is supply disruption In this article Europe's gas storage tanks are 80% full Governments are stepping in Europe's gas storage tanks are 80% full Amid all the doom and gloom, there is at least some positive news in that European countries have been able to fill gas storage ahead of schedule. The European Commission has asked member states to fill reserves up to at least 80% by 1 November. Most countries have already reached that level well ahead of time. Overall, Europe is currently at 80.2%, which is about two months ahead of time. European gas storage has been filling up Natural gas, stock level, country total, fill level (%) Source: Gas Infrastructure Europe (GIE), Macrobond Governments are stepping in This means that the EU has chosen to pay a high price to achieve sufficient gas supply ahead of the winter. At the same time, it is no guarantee that shortages will not happen. As Europe still relies on further imports in the winter months, there is a chance that a cold winter still results in shortages. If these shortages occur, it will be at the end of the winter. However, it currently also looks as if energy supply issues could go beyond this winter into next. While countries are filling their national gas reserves, governments are looking into ways to tackle or at least mitigate the impact of higher energy prices on consumers and corporates. Measures differ between countries, both in terms of magnitude and nature. We provide an overview of the current state of play below and expect more measures to be announced in the coming weeks. National policies introduced to help consumers with rising energy prices Western Europe Eastern Europe   Energy Source: https://think.ing.com/articles/how-europe-is-preparing-for-a-hard-winter/?utm_campaign=September-01_how-europe-is-preparing-for-a-hard-winter&utm_medium=email&utm_source=emailing_article&M_BT=1124162492   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German Economy Will Still Have To Cope With The Delayed Impacts Of Last Year’s Crises

Better Supply Chain Status Contrasted With Ecological Problems And Energy Prices. Situation In Germany Leaves Investors With Mixed Feelings

ING Economics ING Economics 05.09.2022 12:51
With disappointing July trade data, the German economy starts the third quarter on a weak footing Trade is no longer a growth driver but has become a drag on German growth Germany: Exports and imports declined German exports (seasonally and calendar-adjusted) disappointed at the start of the third quarter and dropped by 2.1% month-on-month in July. Imports also decreased, by 1.5% month-on-month, lowering the trade surplus to €5.4bn, from €6.2bn in June. Exports to Russia as a result of the sanctions almost came to a standstill and fell by another 15% month-on-month. Lower energy imports from Russia were the reason for German imports from Russia to drop by more than 17% MoM. Trade is no longer a growth driver but has become a drag on German growth. Since the second quarter of 2021, the growth contribution of net exports has actually been negative. Global supply chain frictions, geopolitical risks and rising production costs are the obvious drivers behind this new trend. Looking ahead, the outlook for German trade is mixed. There is some relief in supply chains and transportation costs. However, at the same time, low water levels, high energy prices and the possible fundamental change in supply chains and production processes on the back of geopolitical uncertainty will be clear obstacles to growth. After yesterday’s encouraging increase in July retail sales, today’s trade data add to the long list of growth concerns for the German economy in the second half of the year. Read this article on THINK TagsGermany Exports Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

Eurozone: Retail Sales Rose Because Of Increased Food And Fuel Consumption

ING Economics ING Economics 05.09.2022 14:30
The small increase in retail sales at the start of the third quarter brings little optimism about the outlook. Increased food and fuel spending masked a decline in sales for all other items. Expect consumption to decline from here on due to the purchasing power squeeze that the eurozone is going through Eurozone retail sales in July Retail sales increased by 0.3% in July, which is small enough for this uptick to be in line with the downward trend seen in recent months. The peak in retail sales was in November and sales in July were about 2.5% below that level. Food and fuel caused the small increase in July as all other items saw a decline of -0.4% in terms of sales volumes. A strong increase in Germany and the Netherlands masked declines in the other large eurozone markets. Don’t expect this to be the start of a sustained upturn in sales. The outlook remains rather bleak for the months ahead as real incomes go through an unprecedented squeeze due to high inflation and lagging wages. We expect consumption to contract for the coming quarters on the back of this. For the European Central Bank though, it is definitely no smoking gun for the start of a contraction. With the September meeting coming up and October of course not long after, the doves are looking for clear evidence that the economy is moving into contraction territory. Today’s data will, in that sense, not be of much help. Still, evidence of a recessionary environment is likely to become more apparent as new data comes in. Read this article on THINK TagsInflation GDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oil Is An Indicator Of The Health Of The Global Economy

Liz Truss As The New Party Leader. OPEC+ And Production Cut

Saxo Bank Saxo Bank 06.09.2022 09:50
Summary:  While the US markets were closed overnight for Labor Day, the futures this morning in Asia are indicating some respite after weeks of red. The US dollar was also softer in early Asian hours, while the focus remains on the European energy crisis and the EU emergency meeting scheduled for Friday. A token cut by OPEC+ and diminishing hope of a revival of the Iran nuclear deal supported oil prices, although China’s tightening restrictions continue to pose demand concerns. Sterling made a sharp recovery after new UK PM Liz Truss announced plans to freeze energy bills, easing some short-term concerns. Consensus expects another 50 basis points rate hike from Reserve Bank of Australia today, and US ISM services will be on the radar later. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. stock markets were closed for Labor Day. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury market was closed for Labor Day. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng TECH Index (HSTECH.I) plunged 1.9% as a Bloomberg story, citing people familiar with the matter, said that the Biden administration is considering imposing restrictions on US investments in Chinese technology companies, Bilibili (09626:xhkg) -3.2%, JD.COM (09618:xhkg) -3.0%, Tencent (00700:xhkg) -2.9%, Alibaba (09988:xhkg) -2.4%. Hang Seng Index fell 1.2%. Chengdu, the largest city in western China, extended its pandemic control lockdown for another three days. The spread of Covid-19 cases and pandemic control measures fueled risk-off sentiment in the market.  Over the weekend, the U.S. Trade Representative said that it received requests from more than 350 American companies to plead for keeping the “Section 301” tariff on goods imported from China, and the Biden administration will remain in place during the review. BYD (01211:xhkg) fell 5.9%, as exchange filing showed that Berkshire Hathaway continued to off-load its stake in BYD.  Other car makers lost as well, Geely (00175) -7%, NIO -6,9, Li Auto 02.3(August).  Thermal coal prices surged in China, following the news that Russia’s Gazprom suspended the supply of natural gas to Germany on the Nord Stream pipeline.  Share prices of coal miners gained, Yancoal Australia (03668:xhkg) +6.6%, Yankuan (01171:xhkg) +12.2%, China Coal (01898:xhkg) +8.3%.  Caixin China Services PMI came in at 55.0, edging down slightly from 55.5 in July but above market expectations. CSI300 spent the day in range-bound trading.  GBPUSD falls to fresh lows, EUR in focus this week The USD lost some ground early in Asia on Tuesday with GBPUSD making the most gains to rise towards 1.1600 as the appointment of new Prime Minister and her plan to freeze energy bills spelled some short-term relief. EURUSD saw a brief drop to 20-year lows below 0.99 yesterday but rose back to 0.9960+ levels in early Asian trading. EURGBP seen sliding slower to 0.8600 but downside may be limited if ECB decides to go for a 75bps rate hike today. But the energy situation and the EU summit on Friday certainly garners more attention with some tough decision ahead. USDJPY retreated from Friday’s 24-year highs of 140.80 to 140.30-levels with Japan’s household spending underperforming expectations at 3.4% y/y vs. expectations of 4.6% y/y. Wage pressures, which remain a key focus for Bank of Japan, also eased with labor cash earnings up 1.8% y/y from last month’s 2.0% y/y. Crude oil prices (CLU2 & LCOV2) Crude oil prices rose on Monday as OPEC+ announced an output cut of 100k bpd in October (more details below). The intention appears to be to keep Brent prices capped at $100/barrels. WTI futures rose to $89/barrel while Brent was above $95/barrel. Price action was also supported by a diminishing hope of a revival of the Iran nuclear deal. US and Iranian positions have diverged in recent days, and it is now expected that the negotiations could stretch beyond the US midterm elections in November. Still, it is key to watch the demand concerns picking up as well, particularly as China lockdowns were extended and will likely remain strict ahead of the CCP meeting on October 16. What to consider? OPEC+ announced a production cut by 100k bpd A token cut by OPEC+ last night of 100k barrels per day just reverses the output increase agreed to last month. The decision was ‘symbolic’, with the new quotas taking effect for October. The amount is significantly small compared to a 100 million bpd market but it shows that OPEC+ wants to set a floor near $100/barrel in Brent. Saudi Arabian oil minister Prince Abdulaziz bin Salman had warned last week that a cut was a possibility given what he said was a disconnect between financial and physical oil markets. The RBA meets today, and is expected to raise rates to 2.35% regardless of the property market struggling Consensus expects the RBA to hike rates by 0.5% which will take Australia’s official interest rate to 2.35%. That will be the highest rate since 2015. However, interest rates futures are pricing in a smaller hike, of just 0.4%. The RBA will likely then proceed to rise rates over the rest of 2022 and then continue to rise rates into the 2023, in a bid to stave off inflation. The issue is, the RBA only has one tool to fight inflation, which is rising rates. But the property market is already struggling to absorb the 1.75% in hikes from May, with property prices falling at their quickest pace since the 80s and construction seeing its biggest decline since 2016. This has seen banks margins (profits) be squeezed, and they face a further squeeze. Why? Australia has one of the highest debt levels in the world (Debt to GPD is 126%). So if the RBA keeps rising rates to slow inflation, it could cause a credit issue and debt to income levels are at risk of hitting GFC highs. RBA outcomes for investors, traders and the macro landscape We highlighted sectors to watch and why yesterday in the Saxo Spotlight. That's worth a quick read. Today, we will be watching what the RBA estimates inflation to be, at the end of the year, remembering the RBA previously said it expects inflation to peak at under 8%. But consider, we traditionally see peak energy (coal) demand later this year, which is likely to support coal prices higher. As such, we think the RBA will rise its inflation target and may allude to commentary about keeping rates higher. For investors and traders, we will be watching energy stocks, which will likely get extra bids today and see momentum rise (not only because of the energy crisis in Europe), but also because Australian energy prices (coal) remains supported, with Australian energy reserves expected to also run out next year. For traders, the currency pair that we are watching is the AUDEUR for an extension to the upside, on the basis that Europe will need to increase energy imports and its balance of trade will likely continue to worsen, vs the Australian balance of trade, likely to hit another record high, with Australian LNG and coal exports to see a lift in demand.    PBOC cuts FX deposit reserve requirement ratio by 200 bps to restrain yuan weakness The PBoC announced that the central bank is cutting the reserve requirement ratio for foreign exchange deposits (the “FX RRR”) to 6% from 8%, effective September 15.  The cut is expected to release about USD19 billion (2% of the USD954 billion FX deposits outstanding) in FX liquidity for banks to make loans in foreign currencies.   The PBoC last cut the FX RRR to 8% from 9% on May 15, in an attempt to send a signal to the market to put a pause to the depreciation of the USDCNY which had weakened from 6.40 to 6.80 in one month (April 15 to May 13, 2022).  After the surge of the USDCNY from 6.75 to above 6.90 in about half a month since Aug 15, the PBoC apparently wants to send a signal again to the market to slow the speed of the renminbi depreciation against the U.S. dollar. Liz Truss won the contest to become the next UK Prime Minister In the UK, the Conservative party has voted for Liz Truss as the new party leader, making her the UK’s next Prime Minister. Her promises range from quick action on energy security to alleviating the cost-of-living crisis for the hardest hit by price rises, all while cutting corporate and other taxes. She has announced a GBP 130bn plan to freeze energy bills, a recipe for ballooning fiscal deficits, an issue that is already an ingredient in sterling’s steep fall this year, so an even steeper recession is in the wings. This could come either from a drop in real GDP due to soaring inflation aggravated by further sterling declines or as demand is crushed by a steep recession due to the need for the Bank of England to accelerate its pace of rate hikes or more likely a combination of the two. Longer term, investments in fracking shale gas and new North Sea exploration could pay dividends. Russia makes a clear case of weaponizing gas supplies While the Kremlin had earlier said that they were halting gas supplies on Nord Stream 1 for a technical fault, it has now clearly said that gas supplies to Europe via the Nord Stream 1 pipeline will not resume in full until the “collective west” lifts sanctions against Moscow over its invasion of Ukraine. Russia is still supplying gas to Europe via Soviet-era pipelines through Ukraine that have remained open despite the invasion, as well as the South Stream pipeline via Turkey. But supplies along the northern pipeline routes, including Nord Stream 1 and the pipelines through Ukraine, have fallen by more than 90% since September last year. Higher supplies from Norway, the UK, north Africa and increased imports of LNG have helped to an extent offset the loss of Russian supplies. Energy summit in EU on Friday EU leaders will meet this Friday to discuss a cap on energy prices across EU countries to limit the disruptions from soaring and illiquid pricing markets, although given limits on generation capacity, much of them due to Russia’s cutting off of gas supplies - possibly semi-permanently in the case of the Nord Stream 1 pipeline – some sort of rationing plan may be required. See our colleague Christopher Dembik’s piece on at the difficult choices Europe faces on this issue here. US ISM services PMI due today With the services sector of the US economy slowing, there are expectations of a slight retreat in August US ISM services, but it should still remain above the 50-mark which differentiates between expansion and contraction. The S&P services PMI for August had also shown a slight decline to 44.1, with the payroll data hinting at still-strong labor market conditions in the services economy.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-6-sept-2022-06092022
Germany’s Economic Outlook For This Year Looks Complicated

Germany: Supply Chains Issues Caused By The War, Lockdowns In China, Water Levels And Finally Energy Prices Worry Germans

ING Economics ING Economics 07.09.2022 09:48
Production in the construction sector prevented industrial activity from falling further in July. At the same time, high energy prices are leaving their mark on German industry   Is this the first gust of wind preluding a perfect storm? In July 2022, production in industry in real terms was down by 0.3% on the previous month on a price, seasonally and calendar adjusted basis, from an upwardly revised 0.8% MoM in June. On the year, industrial production was down by 1.1%. According to the statistical office, the relatively small number of school holidays and holiday leave prevented an even larger decrease in production compared with July last year. On the month, production in industry, excluding energy and construction, was down by 1.0%. Outside industry, energy production in July was up by 2.8% and production in construction by 1.4% from the previous month. Compared with developments in the second quarter, industrial production is down, while the construction sector shows some resilience. High energy prices have become biggest concern German industry is clearly suffering from disrupted supply chains on the back of the war in Ukraine, the aftermath of pre-summer lockdowns in China, low water levels in the main rivers and increasingly, higher energy prices. The statistical office released additional data showing that production in the energy-intensive industrial segments declined by more than the broader industry (-1.9% year-on-year). Production in this area has dropped by 6.9% since February 2022. For Germany’s industrial backbone, small and medium-sized enterprises, higher energy prices look like a ticking time bomb. With ongoing pressure on consumers’ disposable incomes, companies’ pricing power is fading. In this regard, it is remarkable that the government’s third relief package presented on Sunday provided only very limited support for this segment of the economy. Looking ahead, shrinking order books since the start of the Ukraine war, the well-known supply chain problems (both international and domestic) plus high uncertainty, high energy and commodity prices and potential energy supply disruptions will not make life any easier. Judging from the first macro data for the third quarter, the German economy has not fallen off a cliff at the start of the third quarter but is rather sliding into recession. Read this article on THINK TagsIndustrial propduction Germany Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oz Minerals’ Quarterly Copper Output Hit A Record High, Brent Futures Rose

The Copper Has Stopped Falling, The Overall Macroeconomic Sentiment Remains Weak

Saxo Bank Saxo Bank 08.09.2022 14:29
Summary:  Copper is showing signs of stabilizing despite a current negative sentiment towards China-centric commodities. While the overall macro-economic sentiment remains weak, not only in China but also globally due to heightened recession fears, the copper market is showing emerging signs of fundamental strength as mining companies struggle to meet their production targets while demand, surprisingly from China, has lifted tightness in the London market. Copper is showing signs of stabilizing despite an overriding negative sentiment towards China-centric commodities such as copper, cotton and now also crude oil after both WTI and Brent slumped below support on Wednesday. The country’s battle with Covid and the governments steadfast support for its zero tolerance has led to renewed lockdowns and restrictions of movements in regions with around 300 million citizens and that account for one-quarter of Chinas GDP.  It is therefore interesting to note that copper has stopped falling and so far, this week has managed a small bounce after finding support last week at $3.36 per pound. While the overall macro-economic sentiment remains weak, not only in China but also globally due to heightened recession fears, the copper market is showing emerging signs of fundamental strength as mining companies struggle to meet their production targets – top producer Chile has seen its exports slump to a 19-month low due to water restrictions and lower ore quality - while demand from China, surprisingly is showing signs of strengthening.  The current energy crisis in Europe and the increased focus on de-carbonization across the world, not least in China, remains the key driver behind our long-term bullish outlook for copper. These latest developments have driven the spread between spot and the three-month contract on LME to at $145 per tons high today. A backwardation of this magnitude, which normally signals tighter conditions, was last seen last November. Adding to this a continued drop in inventories monitored by the three major copper futures exchanges in London, New York and Shanghai to 193,000 tons, the lowest since January, and speculators are beginning to have second thoughts about continuing to hold net short positions. For the short-term prospect to improve further the recent pickup in demand from China needs to be driven by real demand. At this point it is unclear whether the increase purchases of copper are due a re-opening of the arbitrage window between LME and Shanghai, restocking or just simply a hedge against a weaker Yuan. Having found support last week at $3.36/lb, after retracing 61.8% retracement of the July to August rally, copper is currently staring at resistance in the $3.54 area where recent lows and the 55-day moving average merges. For a real upside and trend reversal to occur the price needs to break above $3.78/lb while a break below $3.36/lb could see the metal take aim at $3/lb.   Source: Copper: supply fundamentals trump weak sentiment | Saxo Group (home.saxo)
Less Precipitation Make Aluminium Smelters In Yunnan (China) Change Its Operating Rate

Commodities: Metals Boosted, It's Time To Talk Energy Crisis In The EU

ING Economics ING Economics 09.09.2022 15:08
Metals have received somewhat of a boost, with supply risks growing and some optimism in Chinese construction. For energy markets, all attention will be on EU energy crisis talks today Source: Shutterstock Energy - EU energy crisis talks today The oil market yesterday managed to recoup some of its declines from earlier in the week. ICE Brent continues to trade below US$90/bbl and the market will be watching for any signs from OPEC+ of possible intervention. The partial recovery in the market comes despite fairly bearish EIA numbers. The EIA reported that US commercial crude oil inventories increased by 8.85MMbbls over the last week - the largest increase seen since April. When you factor in the SPR release, total US crude oil inventories increased by a more modest 1.32MMbbls. An increase in crude imports, lower exports and lower refinery utilization (due to the BP Whiting outage) over the week all contributed to the crude build. Despite lower refinery activity, gasoline and distillate fuel oil stocks increased by 333Mbbls and 95Mbbls respectively. European gas prices continue to trade in a volatile manner, with TTF breaking below EUR200/MWh at one stage yesterday, only to finish the day above EUR220/MWh. The market will be sensitive to developments today, given that EU ministers will be meeting to go through proposals to tackle the energy crisis. These proposals include various forms of a price cap, along with potentially mandatory demand cuts not just for gas but also the power market. Liquidity measures for European power companies will also be pretty high on the priority list. As we have mentioned before - while price caps will offer some relief to consumers, it doesn’t help the market try to balance itself through demand destruction.   Metals – Escondida strike lifts copper prices LME copper prices ended the day higher, amid reports of potential mine strikes in Chile. Workers at BHP’s Escondida, the world’s largest copper mine, voted to go on a partial strike from next week over safety concerns, according to the mine’s union. The strike will result in a partial stoppage on 12 and 14 September and will be followed by an indefinite strike lasting until a deal with BHP is reached. Spread action also suggests a tightening in the prompt copper market. The LME copper cash/3m backwardation reached US$145/t (highest since November) yesterday, compared to a backwardation of US$76/t a day earlier and a contango of US$7.75/t at the start of 2H22. Vale SA raised its nickel production guidance to reach 230-245kt per year in the medium term, higher than its previous forecast of 200-220kt in May, the battery metal producer announced. In the long-term, Vale expects annual nickel production to reach over 300kt to tap into the growing demand for the metal. In ferrous metals, the most active SGX iron ore contract moved above US$100/t yesterday amid hopes of a recovery in construction activity in China. According to the latest market reports, the Chinese city of Zhengzhou will resume all stalled housing projects by 6 October, by making use of special loans, asking developers to return misappropriated funds, and encouraging some real estate firms to file for bankruptcy, according to Reuters reports. Read this article on THINK TagsOil Nickel Natural gas Energy crisis Copper Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The French Housing Market Is More Resilient | The Chance Of Republicans Winning The Senate Is Up

France: Industrial Production Decreased | French GDP (Gross Domestic Product) Is Expected To Decline

ING Economics ING Economics 09.09.2022 16:41
Industrial production fell sharply in July and remains 6% below its pre-pandemic level. Industry will probably contribute negatively to French economic growth in the third quarter   French industrial production fell by 1.6% over one month in July, and the decline was widespread across all branches of the industrial sector. Only construction increased its output by 0.5% over the month. Over a year, industrial production is down by 1%. It is therefore a difficult start to the third quarter for the French industrial sector, which is clearly suffering from the disruption of supply chains due to the war in Ukraine, lockdowns in China, and rising energy prices. Looking ahead, the contraction in order books since February, the high level of stocks of finished goods, high uncertainty, high energy and raw material prices, and potential disruptions to energy supplies do not point to an improved outlook for the French industrial sector. Indeed, the business climate indicator for the sector fell further in August. It is therefore likely that industry will make a negative contribution to French economic growth in the third quarter. The industrial sector only represents 15% of total French value added (20% if we include construction), so the weakness of industry is not enough in itself to conclude that the macroeconomic outlook for the next few quarters has worsened. However, the outlook is not much more favourable in the services sector. The deterioration in purchasing power caused by inflation, the decline in consumer confidence, and the fading of the positive effects of the post-pandemic reopenings will weigh on the dynamism of services in the coming months. As a result, the question is no longer really whether France and other European countries are heading for recession, but rather how fast the recession is coming. Given the developments of the last few weeks, there is a risk that French GDP growth will turn negative in the third quarter. We expect growth of 2.2% for the whole of 2022 and -0.2% for the whole of 2023.  Read this article on THINK TagsIndustrial Production GDP France Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Poland: Rapidly Rising Core Inflation Confirms That The Impulse From Energy Shock Is Strong

Podcast: Discussion On Market Sentiment, Silver And Inflation And More

Saxo Bank Saxo Bank 13.09.2022 10:29
Summary:  Today we discuss the extension of momentum in equities as the market is clearly positioning itself for a weaker than expected US August inflation figure later today. The risk-on sentiment is seen across many markets including the USD which continues to weaken against the EUR which might have got some tailwinds lately from the war success in Ukraine. We also talk about Silver, but more importantly the ongoing European energy crisis that has eased a bit lately with lower energy prices across the board. Finally, we go through stocks to watch with a focus on Ocado's horrible revenue miss and Inditex's earnings tomorrow, ending with a quick rundown of today's macro calendar. Today's pod features Peter Garnry on equities and Ole S. Hansen on commodities. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-sep-13-2022-13092022
Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

The EU And The UK Want To Tackle Soaring Energy Prices, Bank Of England Has To Digest UK Jobs Market Data, Bitcoin's Decent Performance Ahead Of The US Inflation Data

Craig Erlam Craig Erlam 13.09.2022 15:37
We aren’t seeing much change in Europe ahead of the open on Tuesday after a broadly positive session in Asia as China, Hong Kong and South Korea returned following the bank holiday weekend. The last few days have seen a notable improvement in market sentiment. It’s not always easy to pinpoint what’s driving such a turnaround but the fact that it’s happening in the days leading up to the US inflation report is certainly interesting. Perhaps last month’s report has given investors confidence that another faster deceleration could be on the cards for August. That may sound premature but the fact is that two consecutive reports showing a sharp deceleration combined with last month’s goldilocks jobs report will be a really encouraging sign and could trigger a broader risk rebound in the markets. It may not be enough to tip the Fed balance in favour of a more modest 50 basis point rate hike next week but it may slow the pace of tightening thereafter. The Ukrainian counteroffensive in previously Russian-controlled territories in the east and the south, most notably in Kharkiv, may also be lifting sentiment. Pressure will mount on the Kremlin and while there’s no saying what its response will be, there’s certainly more hope that momentum is moving back in favour of Ukraine. Meanwhile, Europe is putting together plans to cope with higher energy prices this winter with the UK joining others in setting a cap on energy bills. While that won’t solve the problem of supplies or generate as much demand destruction, it will protect many households and businesses that otherwise wouldn’t have been able to cope this winter and could save the UK from recession. If not, it will no doubt make it much less severe. Not what the BoE wanted to see It’s not often that you see the unemployment rate fall to the lowest in almost 50 years and aren’t overjoyed, but that will certainly be the feeling at the Bank of England right now. The decline in the rate was driven by a decline in the labour force, while employment rose by only 40,000; far less than expected. What’s more, wage growth accelerated faster than expected, hitting 5.5% including bonuses in the three months to July compared with the same period last year. Less labour market slack and faster wage growth increase the odds of a 75 basis point hike from the MPC next week, especially against the backdrop of higher core inflation expectations over the medium term as a result of the new cap on energy bills. Can it build on the recovery? Bitcoin is holding onto gains ahead of the inflation data. The recovery has been very strong until this point but it may need a favourable report in order to hold onto them. A positive inflation number could see bitcoin add to recent gains with the next major test to the upside falling around $25,500. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Nerves ahead of US inflation - MarketPulseMarketPulse
Acquisition Of Aveva By Schneider Electric, Wheat Prices And More

Acquisition Of Aveva By Schneider Electric, Wheat Prices And More

Saxo Bank Saxo Bank 21.09.2022 10:36
Summary:  Equity markets traded sideways ahead of today’s important FOMC meeting as the Fed is set to bring at least another 75 basis points of tightening and expectations for further tightening are at the highs for the cycle. At the longer end of the yield curve, US yields have risen to new eleven-year highs, helping the US dollar to new highs for the cycle in places, including against the Chinese yuan. The Bank of Japan meets tonight in Asia and has shown no signs of backing down from its cap on bond yields, creating enormous attention as yields have risen again elsewhere. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities came under pressure yesterday as US yields advanced with the 10-year yield reaching as much as 3.6%. The market is split on tonight’s FOMC decision but consensus among economists is still a 75 basis point rake hike. We argued yesterday that if the Fed wants to tighten financial conditions a lot they need a surprise which argues for a 100 basis point hike. In any case, the guidance in the dot-plot and the subsequent press conference will be key for equity sentiment in the near-term. Yesterday’s low in S&P 500 futures at 3,643 is the key support level to watch on the downside and 3,800 after that. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index gave back all its gains yesterday and more, falling over 1% ahead the U.S. FOMC meeting. Mega-cap China interest stocks declined from 1% to 3%, dragging the Hang Seng Tech Index down by over 2%.  Energy stocks outperformed coal mining names up from 1% to 2%.  COSCO Shipping Energy Transportation (01138:xhkg) soared more than 8%. Bloomberg reported that Chinese refiners are applying for quotas from the Chinese government to export as much as 16.5 million tons of fuel oil, such as gasoline and diesel.  CSI 300 fell nearly 1% and making a new low last since May this year. USD traders mull FOMC meeting today A minority of observers are looking for another 75-basis point move from the Fed, as discussed below, with forward guidance also playing a roll, although the market continues to price the end-2023 policy rate at below even the end-2022 rate, with the peak rate somewhere in between, despite FEd pushback. The USD has traded to new highs in places, like against all 5 of the smallest G10 currencies and is near the cycle high versus sterling, while EURUSD and USDJPY still trade slightly away from cycle extremes. The Fed will want to maintain a hawkish tone here, but as US 2-year yields have risen sharply to nearly 4%, the bar is somewhat high for a hawkish surprise. Watching the reactivity in treasury yields and risk sentiment for the impact on the US dollar – particularly how USDJPY might treat a fresh strong surge in longer US yields after the 10-year broke above the former cycle high since 2010 of 3.50% yesterday. USDJPY USDJPY could be set for considerable volatility over the next 24 hours as the Bank of Japan meets tonight in Asia’s Thursday session. The pressure for the Bank of Japan to adjust its yield-curve-control strategy has built further on the surge to new cycle highs in longer US yields yesterday above the 3.50% level. The Bank of Japan and Ministry of finance have recently pushed back rather hard on the latest blast of JPY weakness, but will likely be challenged on where and when they intend to intervene against JPY weakness if the BoJ overnight refuses to adjust its policy and if the Fed surprises hawkish at tonight’s FOMC meeting and the entire US yield curve lifts. The 145.00 area is the cycle high, with 150.00 the next obvious psychological level. Gold (XAUUSD) Gold trades near a two-year low but within a relatively narrow 20-dollar range ahead of today’s FOMC meeting (see below). Weeks of selling have seen speculators accumulate a net short position in COMEX futures, a relatively rare occurrence, and one that could set the stage for a surprise upside move, should the dollar and yield retrace some of their recent strong gains. Resistance however remains firm at $1680 while below $1654, last week's low, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLV2 & LCOX2) Crude oil remains rangebound with a slight negative tilt ahead of today’s FOMC rate hike given its impact on the dollar and growth expectations. The Fed decision will be followed by other central banks from Europe to Asia which are also expected to announce growth reducing rate hikes. The long-term outlook remains price supportive with US production struggling to find a higher gear and Saudi Aramco saying lack of investments could see spare capacity being wiped out. Also focus on Russia from where seaborne exports is lower this month and where Putin is looking into his toolbox for ideas to reverse his disastrous war against Ukraine. Ahead of today’s EIA stock report the API reported builds in crude oil as well as fuel products. Wheat sees largest gain since March on Russia tensions Wheat futures in Chicago (+7.6%) and Paris (+4.1%) jumped on Tuesday after Russia said it intended to hold votes on annexing the three regions of Ukraine still under its control (see below). Such a move raises the risk of a full Russian mobilization and would increase tensions with Europe and the US while casting more doubts over grain supplies from the Black Sea area, especially the UN sponsored export corridor from Ukraine which recently has helped ease supply worries for wheat and sunflower oils. Also focus on today’s FOMC rate hike and its impact on the dollar. December wheat (ZWZ2) at $8.88 trades near the highest level since July but may face resistance at $9.14/bu, the 200-day moving average. US Treasuries (TLT, IEF) US treasury yields spilled over to new cycle highs yesterday ahead of tonight’s FOMC meeting as the market has sensed a hawkish determination from the Fed to forge ahead with rate hike and provide no sense that it set to pivot to a more neutral stance, although that would have to come at some point. The 10-year benchmark rose to a new cycle high yesterday above 3.50%, posting the highest yield since 2011. What is going on? Shocking August German PPI According to the German statistics office Destatis, the PPI rose by 7.9 % month-on-month in August. This is much higher than the consensus (2.4 %). This shows that forecasting in the current macroeconomic environment is more challenging than ever. On a year-over-year basis, the increase is at 45.8 %. This is an historical record. The continued jump is explained by higher energy prices (+139% year-over-year). But not only. Actually, inflation is broad-based. Prices for intermediate goods, for capital goods and for non-durable consumer goods are much higher too. This will probably get worse in the short-term. In the eurozone, it is unlikely the peak in inflation has been reached (contrary to the situation in the United States). Russia-Ukraine tensions heat up Heightened geopolitical tensions regarding Russia and Ukraine where the “separatists” are to hold a referendum in Donetsk, Luhansk, Kherson and Zaporizhya on September 23rd-27th, although Ukraine and its allies have denounced the referendums as illegal, and few countries are likely to recognize the results. An update from Putin on the matter is being awaited, where there have been some suggestions that he is considering introducing martial law and full mobilisation of the Russian army - the speech has now reportedly been delayed until 06:00BST/01:00EDT Wednesday. The move threatens to escalate the conflict even further, potentially giving Putin the formal legal basis to use nuclear weapons to defend what Moscow would consider Russian territory. Riksbank’s 100bps rate hike sets the stage for FOMC The Swedish Riksbank surprised yesterday with a 100-basis point hike to take the rate to 1.75%. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency, which fell to new cycle lows versus the EUR and USD after a kneejerk jump. The decision to hike by 1% was unanimous, prompted by the highest level of CPIF inflation since 1991 and the negative implication it could have on the upcoming wage negotiation which will lock in pay growth for the next three years. However, with global tightening wave turning more hawkish that expectations after ECB’s 75bps rate hike and Riksbank’s 100bps, the stage is being set for the FOMC to deliver above expectations as well. Schneider Electric agrees to acquire Aveva for £9.4bn The French industrial giant is announcing this morning that it has agreed to acquire UK-based engineering and software group Aveva for £31 per share valuing the company at £9.4bn. Schneider Electric already owns 60% of Aveva and a full consolidation will bolster Schneider Electric’s ambitions in software within the engineering industry. Rio Tinto joins BHP in saying Copper’s near-term outlook is challenged Rio Tinto’s CEO has joined a suite of companies, including BHP, saying copper’s short-term outlook faces pressure. From supply-chain issues to 30-year high inflation and restricted demand from China, the metal is seeing less demand, and supply is outpacing supply. However, that is not expected to be the case in the longer term with Goldman Sachs predicting copper demand will exceed supply by 2025 and will push prices to twice their current levels. Copper is used in everything from buildings to automobiles, to wiring in homes and mobile phones. Germany nationalises utility company Uniper The German government is injecting €8bn into Uniper to avoid a collapse of the German utility taking full control of Finland-based utility Forum’s shares in Uniper. What are we watching next? Can the Fed surprise hawkish at FOMC or are we nearing peak tightening expectations? The Powell Fed has kept a hawkish tone in recent communications, clearly indicating a desire to forge ahead with rate hikes. After the strong August US CPI print, a minority of observers are even looking for a 100-bp move from the Fed today, though we are more likely to get 75 basis points. This is a quarterly meeting that will bring the latest Fed forecasts for the economy and for the policy rate, a chance for the Fed to send a further message on where it sees its policy evolving for the remainder of this year and next. The forecast in the “dot plot” of Fed policy rate forecasts for the end of 2022 will receive close attention. Currently the market is looking for a policy rate of about 4.2% through the December meeting, which would mean a 75-bp hike today, another in November, followed by a 50-bp hike in December. The Fed raising the 2023 forecast to a median of 5% might make an impression as well, although the market has persistently priced the Fed to begin easing yields at some point next year, figuring that the economy will be in recession at some point next year. This meeting also brings the first batch of 2025 forecasts for the economy and Fed policy, and another way that the Fed could guide hawkish would be in raising PCE core inflation forecasts for next year and/or 2024 (last two forecasts have kept the last of these at 2.3% YoY) or surprising with its 2025 forecast. Earnings calendar this week This week our earnings focus is on Lennar today as US homebuilders are facing multiple headwinds from still elevated materials prices and rapidly rising interest rates impacting forward demand. Later during this week, we will watch Carnival earnings as forward outlook on cruise demand is a good indicator of the impact on consumption from tighter financial conditions. Today: Lennar, Trip.com, General Mills Thursday: Costco Wholesale, Accenture, FactSet Research Systems, Darden Restaurants Friday: Carnival Economic calendar highlights for today (times GMT) 1400 – US Aug. Existing Home Sales 1430 – EIA’s Weekly Crude and Fuel Stock Report 1800 – US FOMC Rate Announcement / Policy Statement 1830 – US Fed Chair Powell Press Conference 2100 – New Zealand Q3 Westpac Consumer Confidence 2130 – Brazil Selic Rate announcement 2245 – New Zealand Aug. Trade Balance 2300 – New Zealand RBNZ Deputy Governor Hawkesby to speak Bank of Japan meeting Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-21-2022-21092022
Belarusian opposition leader proposed a collaboration to Ukraine

Varta Is Withdrawing Its Fiscal Outlook|The New Stock Is Hensoldt

Saxo Bank Saxo Bank 26.09.2022 14:45
Summary:  In our weekly update on theme baskets performance we highlight energy storage which declined 9.7% last week driven by declines among energy storage and battery providers including German-based Varta declining 38% as the company has withdrawn its fiscal outlook due to elevated energy costs and raw materials. The best relative performer was our defence basket which was bid up due to the Russian mobilisation announcement increasing the need for more weapons to Ukraine and thus lifting the outlook for the defence industyr in the US and Europe. Everything is in free fall Last Monday, we wrote our first weekly update on our equity theme baskets and the last week’s performance turns out to be a continuation of what had been doing badly two weeks, namely themes such as crypto, nextgen medicine, green transformation, e.-commerce, and energy storage. Normally, we would write about the worst and the best performing theme, but in this update we will zoom in on the energy storage theme basket because last week had some dramatic moves in this basket. Energy storage: higher energy costs complicates the transition The green transformation has more political capital behind it than ever as the European continent is set to replace its dependence on Russian energy in the years to come. But higher primary energy costs are complicating the transition making everything in manufacturing more costly. One of the companies in the energy storage basket that is under pressure from higher energy costs is Varta announcing last week that it is withdrawing its fiscal outlook for 2022 as rising raw materials and energy costs are making the business of energy storage products unpredictable. Varta’s share price was down 38% last week. The only reason why the energy storage basket is not down more last week is because the basket contains lithium and cobalt miners which are doing well due to high prices on these two metals as supply continues to be lower than demand. Defence: Russia’s mobilization lifts European defence stocks Russia’s decision last week to mobilize its reserves to drastically increase its manpower in its war in Ukraine has increased the stakes in the war and also the demand for more weapons to Ukraine. Our defence basket was the best performing basket last week down only down 3.3% with the German military company Rheinmetall being the best performing up 6.9%. Analysts remain bullish on Rheinmetall with revenue set to increase from €5.7bn in 2021 to €9.7bn in 2025 as the EU is expected to significantly increase its military spending. It could very well be that the current growth estimates are too low depending on the future outcomes in the war in Ukraine. Today we are also updating our defence basket by removing Ultra Electronics a UK-based defence and security company that has been bought by Cobham back in August. The new stock in the basket is Hensoldt which is a German military technology company which offers solutions across space, air, land, sea, security, and cyber. Source: https://www.home.saxo/content/articles/equities/weekly-update-saxo-thematic-investing-performance-26092022
The Elasticity On Supply Of Fossil Fuels Is Low And The Green Transformation Is Accelerating Electrification

The Elasticity On Supply Of Fossil Fuels Is Low And The Green Transformation Is Accelerating Electrification

Saxo Bank Saxo Bank 04.10.2022 09:40
Summary:  Crisis brings opportunities, and the energy crisis will accelerate the energy transformation in Europe. Fossil fuels will be needed for much longer Due to the high-dimensional complexity of nature and our growing civilisation, society is running from one existential crisis to another, illuminating our fragilities. Each new crisis is unique and our response to it catapults societies on to a new trajectory—this crisis is no different. Evidence is growing that this energy crisis will invigorate concepts such as self-reliance, accelerate the green transformation in Europe and create a potential renaissance for Africa. Most importantly it will accelerate deglobalisation as the world economy splits into two competing systems, with India as the biggest question mark. The world is going through its biggest energy shock since the late 1970s with primary energy costs as a proportion of GDP rising 6.5 percent this year. It is impacting consumers hard and forcing them to cut down on consumption, but it is also forcing factories to curb production and EU politicians to draw up schemes to ration economic resources as the approaching winter puts more pressure on the already troubled energy sector. According to the International Energy Agency, the total primary energy supply to the global economy is 81 percent from coal, oil and natural gas with main source of growth coming from non-OECD countries. As the world is still run on fossil fuels it is natural that the world has spun into a crisis as prices of these three energy sources have increased 350 percent since April 2020. The price increase is the most intense ever experienced in the modern economy and, unlike the 1970s the energy crisis, is total in the sense that it is hitting transportation, heating and electricity. The recently approved US climate and tax bill is paving a legal runway for the oil, gas and coal industry to continue for longer than was expected just two years ago, using a carbon pricing and capture scheme. This may also be one of the reasons why Berkshire Hathaway has increased its stake in Occidental Petroleum and got approval to take over the majority of shares. In our Q1 Outlook we wrote that the global energy sector had the best return expectation with expected returns of 10 percent per annum. Due to rising prices on energy companies this expected annualised return has now fallen to 9 percent, but this is still making the oil and gas industry attractive The energy crisis will slowly ease as the world economy naturally adjusts to the shock and higher prices, but the adjustment will likely take many years. The challenge facing the world’s largest economies is that the elasticity on supply of fossil fuels is low and the green transformation is accelerating electrification—this will put enormous pressure on non-fossil energy sources. It almost seems like a fantasy, and so the oil and gas industry is needed to bridge the gap and prevent energy costs exploding. In order to keep energy costs down we need to see investments, but unfortunately the real capital expenditures are not really increasing at a sufficient enough speed; this is prolonging the adjustment and higher energy prices.  The green transformation will be accelerated China has talked about self-reliance for many years and now Europe is talking from the same book on its energy and defence policies. Europe was already leading the green transformation and has the most energy-efficient economy in the world, but the energy crisis and the move to become independent of Russian oil and gas is still painful for the European continent. However, crisis brings opportunities, and the energy crisis will accelerate the energy transformation in Europe. It will likely make the continent the world leader in energy technology and lead to an enormous export success in the future. While the US conquered the world during the decades-long digitalisation, the return of the physical world will see a return of Europe relative to the US. In the next 10 years the European energy and defence sectors will be drastically transformed and will become much more competitive out of necessity. But in the short term the EU will limit market forces by capping prices, which insulate the consumer on prices, but also prolong the transition while increasing the financial risk for the government absorbing the energy costs. The green transformation is dependent on energy storage, as it creates an energy mix that at times will produce a lot of excess electricity which has to be stored. One of the big potential technologies is Power-to-X, which converts excess electricity to hydrogen through electrolysis of water. Other technologies are batteries, fuel cells and vehicle-to-grid electric vehicles as load stabilisers of the grid. The table below shows our energy storage basket. It’s intended as an inspirational list of companies engaged in these different technologies, and not meant as an investment recommendation. Deglobalisation and its ramifications for equity markets The global energy crisis is grabbing most of the headlines and is directly tied to the tough winter ahead for the global economy. But the real winter for the world is not the energy crisis, but the deglobalisation current which has intensified. The US government has recently restricted Nvidia on their sales of its most advanced AI chips to China as the US government worries they are being used for military applications. The decision followed the US CHIPS Act which is the biggest US industrial policy since WWII and is aimed at quickly increasing production of semiconductors in the US. While the US is charging ahead, we are seeing the same urgency in Europe on semiconductors. China has subsequently invoked the “whole nation system” which has been used twice before, in its space programme and in biotechnology during the pandemic. This time China has decided that it has to muster more resources to become self-reliant on semiconductors. Meanwhile the US is expected to curb exports of semiconductor equipment to China, forcing China to build out the entire production chain of semiconductors. While semiconductors are just one industry the signs are telling. The moves follow the trade wars from the Trump period—the war in Ukraine has painted the picture that the world is splitting into two value systems. Longer term it will drive energy and defence policies, and critical technologies such as semiconductors, and generally reshape global supply chains. Globalisation was the biggest driver behind low inflation over the past 30 years and was instrumental for emerging markets and their equity markets. Globalisation in reverse will cause turmoil for trade surplus countries, put upward pressure on inflation and threaten the USD as the reserve currency.  One underappreciated aspect of deglobalisation and Europe’s drive for energy independence is what it means for Africa. Europe’s drive to become resource independent of Russia means that Africa must fill the gap. That puts Europe in direct longer-term competition with China over resources on the continent and here lies the next geopolitical tension. In the middle of all of this is India: can the world’s most populous country strike a truly neutral position during deglobalisation or will the country be forced to make tough choices? Based on the energy crisis, the green transformation, continued urbanisation and deglobalisation, we still prefer equity themes such as commodities, logistics, renewable energy, defence, India, energy storage and cyber security. Consumption and trade surplus countries are at risk The estimated 6.5 percentage point rise in primary energy costs is a tax on economic growth and it sucks surplus out of the private sector in terms of less disposable income available for consumption and less operating profits for investments by companies. Consumer discretionary stocks have reacted to this pressure by underperforming relative to the global equity market. The most vulnerable part of the consumer sector is the European consumer discretionary sector dominated by French luxury and German carmakers. The list below highlights the 10 largest European consumer discretionary stocks. LVMH Hermes International Christian Dior Volkswagen Inditex EssilorLuxottica Richemont Dry Mercedes-Benz BMW A drop in consumption means an equal drop in production of consumer goods which means that trade surplus countries such as Germany, China, Japan and South Korea are the most vulnerable to a significant slowdown in consumption. All four countries are facing severe structural headwinds and their equity markets have reflected these challenges this year. Our main thesis all along has been that the global equity market is facing a potential 33 percent maximum drawdown before equities reach the trough. The final leg down will likely be driven by a combination of higher interest rates for longer, profit margin compression as companies can no longer pass on rising input costs without severely hurting revenue, and likely a recession in the real economy as a function of the energy crisis. In many ways the next six months will feel like a long dark winter, but rest assured, spring always returns and the brightest days in global equities are still ahead of us. Source: https://www.home.saxo/content/articles/quarterly-outlook/the-bright-side-crises-drive-innovation-04102022
Analysis Of Crude Oil Futures: WTI Has An Initial Support At The Weekly Low

Drivers! OPEC+ Decision Is Shocking! Crude Oil Price Expectations Have Changed!

ING Economics ING Economics 06.10.2022 09:18
There was no doubt that OPEC+ was going to cut supply when the group met in Vienna. However, the agreed 2MMbbls/d supply cut was at the top end of expectations. While the actual cut will be quite a bit smaller, it is still enough to dramatically change the oil balance over 2023 What did OPEC+ agree? Given the amount of noise leading up to the OPEC+ meeting and the fact that the group met in person in Vienna for the first time in over two years, it was clear that the group was going to take some meaningful action. Members of the agreement have for the last couple of months voiced their concerns about the disconnect between the physical and paper market, and that the group would possibly need to take action. We recently saw OPEC+ make a symbolic paper cut of 100Mbbls/d at their September meeting, which translated to an even smaller actual cut. Growing demand concerns have left OPEC+ uneasy and in the lead-up to this week’s meeting, expectations of a supply cut grew from around 1MMbbls/d initially to eventually 2MMbbls/d. Had the group announced a cut towards the lower end of this range, the market would have likely been disappointed. Therefore, OPEC+ announced that they would be cutting supply by 2MMbbls/d from November through until the end of 2023, although output policy could be reviewed before then, if needed. This is the biggest supply reduction seen from the group since the peak of Covid However, given that the bulk of OPEC+ members are producing well below their target production levels, the actual cut seen from the group will be smaller than the announced paper cut. Our numbers suggest that the announced cut will lead to an actual cut of around 1.1MMbbls/d from August production levels. It is likely that only Saudi, UAE, Kuwait, Iraq, Gabon, Algeria and Oman will need to cut output. All other members are already producing below their new target production. This action from OPEC+ will raise some eyebrows, given the uncertain macro outlook, an ongoing energy crisis and uncertainty over how Russian oil supply will evolve once the EU ban on Russian oil and refined products comes into force, along with G7 price cap. The move will also do little to help improve relations between the US and Saudi Arabia. A big winner from these supply cuts will be Russia. They do not need to cut output, given they are already producing below their targeted levels, yet they will benefit from the higher prices we are likely to see as a result of the cuts. OPEC+ agreed paper cuts vs. actual cuts by country (Mbbls/d) Note: Actual cuts use August 2022 production levels Source: OPEC, IEA, ING Research What does this mean for oil prices? The announced cut from OPEC+ dramatically changes the oil balance for the remainder of 2022 and the whole of 2023, assuming we see full compliance. We had previously expected that the global market would see a sizeable surplus for the remainder of this year and then a more marginal surplus over the first half of 2023, before returning to deficit over the second half. However, removing around 1.1MMbbls/d of supply means the market is more balanced over the fourth quarter 2022, and in large deficit over the whole of 2023. We had been expecting ICE Brent to trade in the US$90 area for the remainder of this year and through the first half of next year, before trading back above US$100/bbl in the fourth quarter of 2023. However, this latest action from OPEC+ suggests that there is upside to our current full year 2023 forecast of US$97/bbl. What can counter these cuts? The US administration will not be thrilled with the action taken by OPEC+, particularly given that US mid-term elections are just around the corner. Therefore, in the near term, we could see the US tap its Strategic Petroleum Reserves (SPR). However, with the US having already aggressively drawn down the SPR this year, which has left it at its lowest levels since 1984, there will be limits on much more will be released. Ultimately, OPEC+ can cut output for longer than the US can tap into its SPR. The US administration could also put more pressure on domestic producers to increase output more aggressively. However, we have already seen the US call on domestic producers to do so, yet the rig count has been largely flat since early July. The uncertain demand outlook along with rising costs may be holding some producers back. The OPEC+ supply cut could also put more pressure on the US to work towards an agreement for the Iranian nuclear deal. A positive outcome would mean that Iranian supply could increase by as much as 1.3MMbbls/d, which would more than offset the OPEC+ reduction, although admittedly, it would take some time for Iran to ramp up output if a deal were struck. In addition, there is always the risk that OPEC+ reduces production even further in the event of a nuclear deal. These are all supply-side solutions for the market. Clearly, demand destruction could also help to partly offset these supply cuts, although how much demand destruction we see will really depend on the severity of any upcoming recession. Read this article on THINK TagsSPR Russian oil price cap Russian oil ban OPEC+ Iran nuclear deal Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Inflation Is Cooling, Japan Headline CPI Ticked Up To 3.8% Y/Y

Inflation Report Ahead, What Might It Look Like In The United States (U.S. CPI)?

Kamila Szypuła Kamila Szypuła 08.10.2022 15:52
Recently, we have been watching prices rise every month. Inflation has also hit the US economy. How this time the change in the price of goods and services from the perspective of the consumer can and what it looked like with the last reading. Forecast In August, the Consumer Price Index (CPI) for All Urban Consumers increased 0.1 percent, seasonally adjusted, and rose 8.3 percent over the last 12 months, not seasonally adjusted. The annual inflation rate in the US eased for a second straight month in August of 2022, the lowest in 4 months, from 8.5% in July but above market forecasts of 8.1%. Forecasts for September are the same as for August, ie 8.1%. On Wednesday, September 12, we will know the official results. We can expect that also in September food and energy will become more expensive. Source: investing.com The data presented above shows a general picture, while the division into selected categories is presented in the table below. 12-month percentage change, Consumer Price Index, selected categories, August 2022, not seasonally adjusted Source: https://www.bls.gov/cpi/ Source: U.S Bureau Of Labor Statistics Energy It may be noted that energy prices in August 2022, compared to the same month last year, increased by 23.8%. It was the highest increase among the categories. Crude oil and natural gas prices were already high entering 2022 as rebounding global demand for energy commodities occurred faster than supplies have been able to keep up. But on Feb. 24, prices spiked further following Russia’s invasion of Ukraine. Russia is a major producer and exporter of crude oil and natural gas for Europe. Subsequent sanctions against Russia drove energy prices higher as countries looked elsewhere to purchase their crude oil. In the U.S., crude oil accounts for about 54% of the cost of gasoline at the pump, according to Energy Information Administration data (EIA). The limited supply of this commodity thus drove up the national average for gasoline in the U.S. to over $4/gallon, according to EIA data. This situation mainly affects European consumers, but also American consumers bear costs such as the costs of distillation and transportation. Moreover, it may affect the results of the economic growth of the American economy. Food Compared to August 2021, food prices increased significantly in August this year. For many of us, going to the grocery store is where we really feel this crushing inflation. We see a big price for our groceries lining up at the checkout and then do some calculations in our heads to determine what other things we can sacrifice financially as we have just been hit by a high food bill. For lower-income Americans, the situation is particularly worrying. Soaring food prices are regressive and particularly damaging to them, as they spend more of their after-tax income on food compared to higher-income Americans. In such a situation, they will decide to buy more modest groceries and may not even go to the cinema or not go out to dinner in the city, which may have worse consequences for such people, for example not going to the doctor or not turning on the air conditioning. The increase in prices not only negatively affects consumers, but also manufacturers and entrepreneurs. Food prices also exacerbate labor shortages and government interventions that discourage work and increase labor costs. Summary This is a difficult time for all Americans. The current inflation is acting like a tax on all of us and is damaging our quality of life. Policy makers at all levels of government should be focused on eliminating the many government interventions that drive up prices, including food prices. Instead of fueling inflation, policymakers must remove the policies that contribute to it.
Key events in developed markets next week - 28.01.2023

Europe Remains In The Eye Of The Storm (War In Ukraine And High Energy Prices)

ING Economics ING Economics 09.10.2022 09:17
As the global economy slides into a winter recession, Europe is in the eye of the storm. High energy costs caused by the war in Ukraine and rising interest rates have sent a cold chill through the region, which is only set to get worse. And as ING's Carsten Brzeski explains, there is no easy way out More economic drama for Europe amid global shockwaves As energy prices skyrocket and central banks scramble, Europe currently finds itself at the epicentre of serious global economic shockwaves. With the entire region now sliding into recession and the risk of policy mistakes rising, ING's Carsten Brzeski questions just how severe the downturn could be. The rebound we're likely to see will no doubt be far from traditional, but we're certain of one thing: the current crisis will be a major game-changer for the eurozone. Share    Download article as PDF   The global economy has clearly not turned for the better in recent weeks. On the contrary, our earlier fears of a looming recession seem to have become a reality. All sentiment indicators point to a slowing of the global economy; the only question is how severe this slowdown will be. The deceleration in activity is being driven by high energy and commodity prices but increasingly also by higher interest rates. Let’s not forget that over the last 70 years, the most common trigger for a global recession has indeed been too aggressive monetary policy tightening. It is no surprise that Europe remains in the eye of the storm. The war in Ukraine continues to rage on and the risk of further escalation seems higher than a peace deal being reached any time soon. High energy prices have increasingly found their way into the real economy, denting private consumption, industrial production and shrinking profit margins. The silver lining of filled national gas reserves has recently become clouded again by the stoppage of the Nordstream 1 pipeline and the cold September weather. The risk of energy supply disruptions is back again. Even worse, there is an increasing awareness that high energy prices will not only be a problem for this winter but also for next. While everyone is still assessing the depth of a potential winter recession, another risk has not yet received sufficient attention; the eurozone may be witnessing the end of the business cycle as we knew it. Energy prices are very likely to remain high – very high – in the coming years. This will be a structural, not just cyclical burden on companies’ cost competitiveness and households’ purchasing power. It is a structural shift that could be compared with the deleveraging many eurozone countries saw after the financial crisis and which led to subdued growth for many years. Consequently, the risk is high that the eurozone economy will not experience a V-shaped or U-shaped recovery but rather, a J-shaped recovery. This distinction between a rather traditional cyclical recession and a recession at the start of a structural change is important as it has implications for the right policy answer. Currently, many governments have started to support the demand side of the economy with large fiscal stimulus packages. It is a recipe that worked well during the pandemic. However, the history of previous crises or downturns in the eurozone shows that such fiscal stimulus only works in the absence of structural issues. In the case of highly needed structural change and transition, fiscal stimulus aimed at the demand side of the economy rather runs the risk of delaying change at the cost of surging government debt. It is not easy to be a European policymaker these days. The potential economic fallout of the looming recession could be painful and in a worst-case scenario runs the risk of destroying production capacity for good. At the same time, the European economy is facing a structural energy shock which actually requires a policy answer aimed at the supply side of the economy. Currently, however, most efforts are aimed at the demand side, and monetary and fiscal policy are clearly not in sync. While the European Central Bank is hiking interest rates to fight inflation and inflation expectations, implicitly accepting a weakening of the demand side, governments are actually supporting the demand side. Delivering fiscal stimulus that is both aimed at the supply and demand side of the economy is possible in theory, but in practice, there are clear limits to such stimulus in the form of too high government debt, as the recent market reaction to the UK government’s fiscal stimulus plans showed. An uncomfortable truth is that the current crisis in Europe cannot be quickly and easily resolved. Indeed, it increasingly appears that it cannot be resolved without accepting economic damage. We are bracing for a tough winter.     Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
There Are Risks That An Increase In The Price Of Oil May Provoke China To Limit The Export Of Diesel Fuel

Forecast That The Global Commodities Market Will Likely Be In Deficit

ING Economics ING Economics 09.10.2022 09:29
Commodity markets have come under pressure due to a strengthening US dollar and a raft of central banks hiking interest rates recently. This has clouded the macro outlook. However, the supply picture for a number of commodities remains fragile In this article The OPEC+ put Price caps and price forecasts Even tighter times ahead for European gas Source: Shutterstock The OPEC+ put Oil prices came under pressure in September, with ICE Brent falling by almost 9% over the month and trading to the lowest levels since January. US dollar strength and central bank tightening have weighed on prices and clouded the demand outlook. From a supply perspective, the oil market has been in a more comfortable position. Russian oil supply has held up better than most were expecting due to China and India stepping in to buy large volumes of discounted Russian crude oil. The demand picture has also been weaker than expected. However, we believe there is a good floor for the market not too far below current levels. Firstly, the EU ban on Russian oil comes into force on 5 December, followed by a refined products ban on 5 February. This should eventually lead to a decline in Russian supply, as it is unlikely that China and India would be able to absorb significantly more Russian oil. Secondly, US Strategic Petroleum Reserve releases are set to end later this year. If not extended, we could start to see large drawdowns in US commercial inventories, which are very visible to the market and could provide more support. Potential OPEC+ intervention should also provide a good floor to the market. Already this week, OPEC+ announced a 2MMbbls/d supply cut through until the end of 2023. However, it is important to remember that given OPEC+  is cutting output from target production levels, the actual cut will be smaller given that most OPEC+ members are already producing well below their target levels. Our numbers suggest that the group’s paper cut of 2MMbbls/d will work out to an actual cut of around 1.1MMbbls/d. Price caps and price forecasts As for the proposed G7 price cap on Russian oil, the EU now appears to have agreed on the mechanism. However, once implemented, there is still plenty of uncertainty over whether it will have the desired effect of keeping Russian oil flowing and limiting Russian oil revenues. Without the participation of big buyers, such as China and India, it is difficult to see the price cap being very successful. In addition, there is always the risk that Russia reduces output in response to the price cap. We currently expect Brent to trade largely within the US$90 area for the remainder of this year and into the first half of 2023, before strengthening over the second half of 2023. However, given the large supply cut recently announced by OPEC+, the global market will likely be in deficit through the whole of 2023, suggesting that there is upside to our current forecasts. Even tighter times ahead for European gas European natural gas prices have come off their highs in August, falling more than 40% from the recent peak. Comfortable inventory levels have helped, with storage 89% full already. The EU has also managed to build storage at a quicker pace than originally planned. In addition, intervention from the EU is likely to leave some market participants on the sidelines, given the uncertainty over how policy may evolve. It also appears that the EU is moving towards a price cap on natural gas in some shape or form. Whilst this will offer some relief to consumers, it does not solve the fundamental issue of a tight market for the upcoming winter. We need to see demand destruction in order to balance the market through the high demand months of the winter, but capping prices will do little to ensure this. It will be difficult to get through this period unless we see demand falling aggressively, and this becomes more of a challenge when we see seasonally higher demand. The latest numbers from Eurostat show that EU gas consumption was 11% below the five-year average over July, falling short of the 15% reduction the EU is targeting. In recent weeks, consumption has also come under further pressure as a result of industrial shutdowns. EU gas storage above target levels while demand comes under pressure Source: GIE, Eurostat, ING Research   It is looking increasingly likely that the trend for Russian gas flows is lower in the months ahead. At the moment, the EU is only receiving Russian pipeline natural gas via Ukraine and through TurkStream, and there is the risk that we will see these flows decline as well. Recently, Gazprom warned that Russia could sanction Ukraine’s Naftogaz due to ongoing arbitration. This would mean that Gazprom would be unable to pay transit fees to Naftogaz, which puts this supply at risk. At the moment, volumes transiting Ukraine are in the region of 40mcm/day. Meanwhile, total daily Russian flows via pipeline to the EU are down in the region of 75-80% year-on-year. The EU should be able to get through the upcoming winter if demand declines by 15% from the five-year average between now and the end of March. The bigger concern, however, will be for the following winter in 2023/24. Earlier this year, we saw some decent flows of Russian gas, which helped with rebuilding inventory. Next year, Russian flows are likely to be minimal, which means that the EU may build inventories at a slower pace. We therefore expect to go into winter in 2023/24 with very tight inventories, which suggests the risk of even higher prices over this period. TagsOil Natural gas Monthly Update Energy crisis Energy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Credit Q&A: where do we go from here?

The US Energy Sector Has Delivered The Strongest Earnings Growth

Saxo Bank Saxo Bank 10.10.2022 09:23
Summary:  It will be a huge week for markets with, with equities on a knife edge awaiting key US CPI data and quarterly earnings season kicking off. Without the star-Energy earnings this season, what can you expect? Plus, on the macro front; US inflation data is out on Thursday, as well as the FOMC meeting minutes, which could set the path ahead for US yields and the US dollar. China releases its CPI and financing data, with both expected to rise. In Singapore Q3 GPD data is on tap, while Australia’s economic calendar is light, the focus is on Australian corporate AGMs. US CPI key this week, Fed minutes also due US inflation data out on Thursday be the next catalyst to test the Fed’s pivot narrative, and the path ahead for US yields and US dollar. Headline inflation is expected to fall slightly but stay above 8%. Bloomberg consensus expectations are at 8.1% y/y from 8.3% y/y in August, but the m/m print is expected higher at 0.2% from 0.1% previously. The core measure is also likely to swell further, and come in at 6.5% y/y from 6.3% in August. While market reaction to CPI print cannot be ignored as pricing for Fed’s path remains volatile, Fed members have been clear about their intent to keep rates high until inflation comes down materially. This suggests that even if we see further rate cut pricing for 2023, we will get a stronger pushback from Fed members and the markets will need to revise their thinking eventually. FOMC meeting minutes will be released on Thursday October 13, from the September 21 meeting and will likely continue to send out hawkish signals. China’s aggregate financing data is expected to rise in September China’s New loans, aggregate financing, and money supply data are scheduled to release sometime in this week.  The median forecast of RMB new loans in September as per Bloomberg’s survey is RMB1,800 billion, much above the RMB1,250 billion in August and the RMB1,660 billion a year ago in September 2021. New aggregate financing in September is expected to rise to RMB2,750 billion from RMB2,430 billion in August, but below the RMB2,903 billion in September 2021. The instructions as well as window guidance from the regulators to urge banks to lend to infrastructure projects and industries deemed important to the real economy were likely to have lifted the amount of new loans.  China’s CPI is expected to rise in September China is releasing CPI and PPI data on Friday. The median forecast in the Bloomberg survey is expecting the CPI to rise to 2.9% Y/Y in September from 2.5% Y/Y in August.  The rise is likely to attribute to higher food prices, including pork prices during the month.  PPI is expected to fall to 1.0% Y/Y in September from 2.3% in August, helped by a high base last year.  Singapore’s Q3 GDP and MAS policy decision due this week Singapore reports advance estimate of Q3 GDP, along with the Monetary Authority of Singapore’s (MAS) policy decision, on October 14. Bloomberg estimates suggest some weakening, with the median consensus estimate at 3.4% y/y, from GDP growth of 4.4% y/y in the second quarter. However, q/q growth is expected to turn positive at 0.7% from -0.2% previously, thereby avoiding a technical recession. Inflation, meanwhile, has breached the 7%-mark and broad-based price pressures mean higher-for-longer inflation. This suggests MAS will continue to tighten the monetary policy, and a re-centring of the S$NEER policy band to its prevailing level can be expected. Still, the boost to the SGD may remain limited as potentially more USD gains remain likely for now. If the MAS increases the slope of the band also alongside, that could mean slightly more hawkishness suggesting some near-term gains in SGD. Earnings season kicks off; Here is what to expect this week US Q3 earnings reporting season kicks off this week with several leading US banks revealing results on Friday. The market will focus on JPMorganChase (JPM:xnys), Morgan Stanley (MS:xnys) and Citigroup (C:xnys). The key things to watch are the investment banks ability to increase their net interest margin and if the quality of their loan books have deteriorated or improved. Consumer brands such as Pepsi (PEP:xnas), Walgreens Boots Alliance (WBA;xnas), and Delta Air Lines (DAL:xnys) will also be important earnings to watch, which will give clues as to how the consumer is spending amid the cost-of-living crisis. The three major themes to watch this US Corporate earnings season Firstly; it’s important to reflect that this year the Energy sector has delivered the strongest earnings growth (in Q1 and Q2), which has held up overall S&P500 earnings figures. But now, Q3 Energy earnings will likely buck that trend; with oil earnings likely to fall after the oil price pulled back with the WTI price falling about 24% from July to September. Last week, Shell highlighted it’s bracing for profit-hits from lower refining margins; which could also signal the end of rising profits from oil giants overall in Q3. Shell expects its oil-refining margin to nearly halve to $15 a barrel in the Q3, from $28 a barrel in the prior quarter. Shell is one of the most traded stocks at Saxo this month, with the majority of its transactions last week being sells and or shorts. (For a technical on Shell, click here.) But weaker earnings for energy for one quarter, don’t spell the end of a trend necessarily. So far this month, and quarter (Q4), the oil price has risen ~13%. So if oil continues to move up amid the lack of oil supply fears, Q4 could earnings for energy could shine once more (if oil moves up for the rest of the year that is). Secondly, the other likely theme to play out in Q3, will also be a drop in overall earnings caused by a higher US dollar, and higher wages. Thirdly, unrealistic earnings expectations might not be met  as well, with ‘negative surprises’ to pop up everywhere, as written by Peter here. And finally, when it comes to earnings season, keep in mind a company’s shares can often move if their earnings results and outlook is stronger than expected, or weaker than expected. So keep abreast of the latest Saxo insights.   Key economic releases & central bank meetings this week   Monday, Oct 10 US: Columbus Day - bond markets closed (stock markets opened) Eurozone: Sentix Investor Confidence (Oct)Japan: Health-Sports Day holiday Tuesday, Oct 11 US: New York Fed Survey of Consumer Expectations US: 3-year treasury note auction UK: Labour Market Report (Sep) Japan: Current Account (Aug) Japan: Current Economic Conditions Wednesday, Oct 12 US: PPI (Sep) US: Atlanta Fed Business Inflation Expectations (Oct) US: 10-year treasury note auction US: FOMC Minutes (Sep) UK: Monthly GDP (Aug) UK: Industrial Production (Aug) Eurozone: Industrial production (Aug) Japan: Machinery Orders (Aug) Korea: Bank of Korea meeting India: CPI (Sep) India: Industrial Production (Aug) Thursday, Oct 13 US: Jobless claims (weekly) US: CPI (Sep) US: 30-year bond auction Germany: CPI (Sep-final) Japan: PPI (Sep) Friday, Oct 14 US: Retail Sales (Sep) US: U of Michigan Consumer Sentiment Survey (Oct-preliminary) Japan: M2 (Sep) China: PPI (Sep) China: CPI (Sep) China: Trade Data (Sep) Singapore: Monetary Authority of Singapore meeting Singapore: GDP (Q3) Sometime in the week China: Aggregate Financing (Sep)   Key company earnings releases this week   Wednesday: Pepsi (PEP:xnas) Thursday: Progressive (PGR:xnys), Fast Retailing (9983:xtks), Trivago (TRVG:xnas), Walgreens Boots Alliance (WBA;xnas), Fastenal (FAST:xnas) , BlackRock (BLK:xnys), Delta Airlines (DAL:xnys), Domino’s Pizza (DOM:xlon) Friday: Shanghai Putailai New Energy (603659:xssc), YTO Express (06123:xhkg), PNC Financial (PNC:xnys), JPMorganChase (JPM:xnys), Morgan Stanley (MS:xnys), Citigroup (C:xnys), UnitedHealth (UEEC:xnas), Wells Fargo (WFC:xnys), US Bancorp (USB:xnys) , First Republic Bank (FRC:xnyc) For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-10-14-october-2022-10102022
Conflict Over Taiwan Would Trigger A Huge Global economic Shock

Elon Musk Is Getting Into Geopolitics| Russia And Another Attack

Kamila Szypuła Kamila Szypuła 10.10.2022 13:48
The new week has started and the markets await more important reports. While waiting for new reports, it is also worth getting acquainted with information on other events in various areas that may affect the situation on the markets. In this article: Relevance of the payment Market volatility Another attack Fear and financial risk Musk's proposal The global energy investment How payments affect the brand JP Morgan in its tweet discusses the importance of payments for the brand. The significance of the payment for the brand is wider explained in the attached short video.   Payments power and support shopping in many ways, directly improving overall brand perception. https://t.co/Eooh2EjJLT pic.twitter.com/yfwnxfH28v — J.P. Morgan (@jpmorgan) October 4, 2022 Building a strong brand is a comprehensive and multi-channel process. Creating a strong and meaningful brand should start inside the company. In order to find out what is important for clients, companies ask them to fill in questionnaires. Recently, payment methods have become more important. Understanding how this detail can affect brands can help companies improve their position. What really is the cause of market volatility? UBS in its last post on twitter informs about the topic of the last UBS Trending clip. The main topic is market volatility and what is the cause of this situation.   As US market volatility continues, many investors are wondering what really is the cause of it all? And are there investment opportunities out there? Find out in this episode of #UBSTrending. #shareUBS pic.twitter.com/edhHPLcsOh — UBS (@UBS) October 9, 2022 Volatility can be high or low. The greater the market volatility, the greater the short-term profitability. However, it is often considered that investing in the most volatile currency pairs or other assets is very risky and therefore the risk of loss is high. In times of high market volatility, prices tend to move very dynamically and rapidly in the short term. For investors, knowing the reasons for this may be helpful in making a decision. Russia is still attacking *Walter Bloomberg tweets about Russia's intentions, following a statement by Russian Defense Minister.   RUSSIAN DEFENCE MINISTRY: RUSSIA LAUNCHED MASSIVE ATTACK ON UKRAINIAN MILITARY COMMAND, COMMUNICATIONS AND ENERGY SYSTEMS - RIA — *Walter Bloomberg (@DeItaone) October 10, 2022 The situation on the front line continues to escalate. Russia is still attacking and is planning further attacks. The deepening of the dispute affects not only the geopolitical situation, but also individual citizens. Not only does the lack of peace evoke negative emotions, but there will also be questions about what to do next, prices are rising as a result of the conflict. With the coming winter uncertainty, fears will increase with subsequent attacks. How To Deal With Fear Morningstar, Inc. in his tweet, he discusses the impact of fear on investments. Sarah Newcomb (@finance_therapy) advises on how to manage fear.   Fear can change how you perceive financial risk.As investors, we cannot eliminate risk entirely, so we must instead learn to conquer — or at least manage — our fears, writes @finance_therapy. Here's how: https://t.co/thYiDUVF2c — Morningstar, Inc. (@MorningstarInc) October 9, 2022 We make most bad decisions under the influence of emotions. Financial decisions can have drastic consequences when influenced by them. In the investment world, risk is common, but the associated emotions, such as fear, can distort our perception of the situation. Not only investors, but also every single person should learn how to advise and manage emotions when making decisions. Such a skill can save you from negative consequences. Musk’s idea for China-Taiwan conflict resolution CNBC On Twitter write about Musk's proposal for China-Taiwan.   Musk's proposal for China-Taiwan relations gets slammed: Our freedom is 'not for sale' https://t.co/o3lQaCVHKq — CNBC (@CNBC) October 10, 2022 Elon Musk has stepped into geopolitics once again, suggesting a deal where Taiwan becomes China's "special administrative zone" and Beijing likely has some control over a self-governing island. This suggestion sparked the anger of Taiwanese politicians. Both sides want to resolve their conflict without an armed confrontation. The businessman's statement may spark a storm of controversy. Taiwan wants to remain independent, but China approves of Musk's idea. Uncertainty about the global energy investment BloombergNEF's post discusses the future prospects of the global energy investment   There's considerable uncertainty about the global energy investment required to achieve meaningful decarbonization. The most frequently referenced scenarios offer very different outlooks - so we took a look at each to better understand potential capital flows up to 2050. 🧵 — BloombergNEF (@BloombergNEF) October 6, 2022 It is important to understand the different markets and their prospects in different times. Assessment of what is and may possibly influence subsequent decisions. With the global energy in the world of geopolitical tensions in the spotlight, what is happening now will have a significant impact on the future.
The Bank Of England Is Likely To See One Or Two More Rate Hikes In The First Half Of The Year

Bank Of England Is Facing A Difficult Decision |UK Government Energy Price Guarantee Will Change From Next April

ING Economics ING Economics 18.10.2022 13:12
The UK government has announced it will make its energy price cap less generous from April next year. That could add 3pp to inflation for much of 2023, and depending on how the changes are made, could deepen the recession we're forecasting this winter. We now expect a 'smaller' 75bp rate hike from the Bank of England in November In this article The UK Chancellor has reversed much of the ill-fated growth plan Fiscal U-turns give Bank of England a route to less aggressive tightening The UK Chancellor has reversed much of the ill-fated growth plan UK bond markets reacted well to new Chancellor Jeremy Hunt’s announcement that large parts of the so-called "mini" Budget will be reversed. That said, there is undoubtedly further work to be done. For debt to fall as a share of GDP, the government needs to find £72bn a year by 2026/27, according to leaked reports from the Office for Budget Responsibility over the weekend. Recent U-turns have roughly halved that shortfall. That inevitably leaves more to be announced by the time of the 31 October Medium-Term Fiscal Plan. We expect a revenue cap on renewable energy generators, and cuts to public sector investment, to do some of the leg work (we wrote more on the different options yesterday). The Chancellor will also hope the fall in Gilt yields will enable the OBR to lower its estimate of future debt-servicing costs. But by far the most consequential announcement for the UK economy on Monday was that the government’s energy price guarantee will change from next April. At present, this guarantee has fixed consumer gas/electric unit prices such that the average household’s annual bill is capped at £2500 for the next two years. The Chancellor has signalled that will no longer be the case from April, and instead will become more targeted. The government is getting a helping hand from a plunge in gas prices   Source: Macrobond, ING   The fact that the energy guarantee currently applies equally to all households does suggest some room to make the policy more targeted, though in practice that’s complicated. Any policy needs to recognise a) that energy usage doesn’t vary hugely across the income spectrum, but b) it does vary considerably within different income brackets (owing to varying household sizes). At present, the government only really has two ways to means-test its energy price cap. The most obvious option is to offer all households the same energy price but to temporarily raise higher rates of income tax to make the system fairer. That would probably be the most accurate and therefore cost-effective option, but would most likely be politically untenable. The alternative would simply differentiate between those on Universal Credit (welfare benefits) - around 15-20% of energy-using households - and those that aren’t. This is effectively what former Chancellor Rishi Sunak did before the summer. Barring the Treasury finding a more innovative solution, this option could conceivably see most households move back onto the price set quarterly by the regulator Ofgem from April 2023. Using current gas/electricity futures prices, we estimate that the average household electricity bill would total £3700 in fiscal year 2023, peaking at £4250 on an annualised basis between April and June next year. The cost of the energy price guarantee has more than halved   Source: Refinitiv, ING estimates Cost calculation takes the difference between the £2500 cap and our projected estimates of where household bills would be without government support. This is then multiplied by the number of households using electricity/gas (for simplicity we're using the price paid by those on duel-fuel direct debit payment)   This could save the Treasury roughly £25bn in FY2023 and a further £6bn in FY2024, if we make the simple assumption that those on Universal Credit continue to have their bills fixed for the full two years. If that doesn’t sound like that much, it’s because gas prices have fallen considerably in recent weeks. By our estimates, the cost of the household energy cap has more than halved since its inception. Of course, this sort of policy would inevitably come at a cost to both growth and inflation. The chart below shows that inflation would be roughly 3 percentage points higher through much of 2023 if energy prices revert to those set by the regulator Ofgem. Households across the income spectrum would in most cases be spending close to, or in excess of, 10% of their disposable incomes on energy bills in FY2023. That would be 15%+ if energy prices were to return to their August high – and it’s worth saying that our Commodities team forecasts gas prices to end up higher next winter than during the coming one. Inflation could be 3pp higher through much of 2023 if most households revert back to the Ofgem price Source: Macrobond, ING   That kind of hit to disposable incomes would inevitably deepen what would otherwise hopefully be a reasonably mild recession this winter. The Chancellor will be hoping that energy prices continue to fall, lessening the blow to households. Indeed for now his focus is on reducing the OBR’s borrowing estimates as much as possible in its forecast due on 31 October. He’ll also be hoping a scaled-back support package will reduce the need for the Bank of England to tighten aggressively. But in practice – and especially if gas prices start rising again – we think the Treasury may well need to offer extra support in one form or another before April next year. Households could spend around 10% of disposable income on energy without the government guarantee Source: ING analysis of ONS Living Costs and Food Survey, Effects of Tax and Benefits, Ofgem, UK Treasury For simplicity we've used most recent 2020/21 equivalised disposable income data (in practice this will have increased but doesn't materially change the end result). Assumes all households move back to the Ofgem price cap system and that energy prices increase by same percentage for all income deciles. Disposable income = after income tax/national insurance etc but before accounting for housing and other costs Fiscal U-turns give Bank of England a route to less aggressive tightening For the time being though, the moves by the Chancellor will reduce the need for the Bank of England to act as aggressively. Having pencilled in a 100 basis-point rate hike in November, we now think that’s more likely to be 75bp. Markets are still expecting Bank Rate to peak at 5.2% next summer, albeit this pricing has been pared back since the fiscal U-turns. This leaves the Bank with a difficult decision: meet those expectations, and bake in what are now very uncomfortable mortgage and corporate borrowing rates. Undershoot investor expectations, and the pound could fall materially. But in practice a weaker pound – and the extra imported inflation that might bring – is probably more desirable than the current strains that are starting to emerge as a result of ultra-high borrowing costs. The challenge for policymakers will be to gradually talk down market rate expectations without causing abrupt pressure on the currency. Ultimately, we think a 75bp hike in November will be followed by another 50-75bp hike in December. We think Bank Rate will peak somewhere between 3.5-4%.   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Federal Reserve: Back to 25bp hikes as slowdown fears mount

The Aggressive Policy Of The Fed May Harm The Economy

Saxo Bank Saxo Bank 22.10.2022 08:01
Summary:  Winter is coming to the financial markets as central banks are tightening their grip. How will markets be after hibernation? I am sorry to disappoint our younger readers of this Q4 Outlook who think that its title is a play on Games of Thrones. Rather, it’s a reference to the 1970s movie Being There, in which Peter Sellers plays Chauncey Gardiner, a simple gardener who becomes a sensation on Wall Street and as a presidential adviser. Observers misinterpret his basic gardening and seasonal tips as oracular advice—for example, “In the garden, growth has its seasons. First comes spring and summer, but then we have fall and winter.”   This year winter is coming once again for global markets. Winter came already for the crypto market last year and has lingered since the pivot by the Fed in November 2021. And more broadly speaking, the same has been the case for the equity market, save for a brief thaw in the spring of this year and then for a sunny couple of months after the 16th June FOMC meeting. That meeting’s super-size 0.75 percent rate hike had the market hoping that peak Fed would arrive sooner rather than later due to the anticipated damage that the aggressive Fed hiking cycle would do to the economy.  We have argued since early 2020 that inflation would be deep rooted and persistent. This view still holds but we are fast approaching a breaking point for the global economy—one that we’ll arrive at due to the “peak hawkishness” from policymakers over the next quarter or so. Three factors will lead to this breaking point.  First, global central banks realise that it’s better for them to err on the side of excess hawkishness than continuing to peddle the narrative that inflation is transitory and will remain anchored. Second, the US dollar is incredibly strong and reduces global liquidity through the increased import prices of commodities and goods, reducing real growth. Third, the Fed is set to finally achieve the full run-rate of its QT program, which will reduce its bloated balance sheet by up to $95bn per month. This triple whammy of headwinds should mean that in Q4 we should see an increase in volatility at a minimum, and potentially strong headwinds for bond and equity markets.   The question facing investor is really this: If we are set for peak hawkishness in Q4, what then comes next? The answer is possibly that the market begins to price the anticipation of recession rather than merely adjusting valuation multiples due to higher yields. That turning point to pricing an incoming recession, again, could come in December, when the energy prices peak with the above trio.  It's estimated the total share of energy in the global economy has risen from 6.5 percent to more than 13 percent. This means a net loss of 6.5 percent GDP, whether through an increase in prices relative to lower volumes or service output, or however one wants to define it. The loss needs to be paid for by an increase in productivity or lower real rates.   And lower real rates will need to be maintained to avoid the seizing up of our debt-saturated economies. This means that there are really two ways this can play out: higher inflation persists well above the policy rate, or yields fall even faster than inflation. Which one will it be? That will be the critical question.  The odds right now favour another 50-70 bps higher for US and global interest rates, while inflation remains either stuck at high levels or only comes off gradually, meaning risk-off is the most likely outcome during this window of time. But beyond our anticipated peak hawkishness scenario, the market will be champing at the bit to go long risk assets on any sign that policymakers have surrendered in their fight against inflation as the costs of tighter policy become unacceptable relative to supporting the economy and labour markets, and the costs of servicing sovereign debt. The battle is on, but to paraphrase Chauncey Gardiner, before we can have spring we must have fall and winter.   Safe travels, Steen Jakobsen  Chief Investment Officer, Saxo Bank Group  Explore products at Saxo   Source: https://www.home.saxo/content/articles/quarterly-outlook/winter-is-coming-04102022
Inflation in France increased to 6.2%. ING points to "fuel shortages" and food prices

In the European Union share of energy in food producers' costs rose dramatically

ING Economics ING Economics 27.10.2022 12:19
Surging energy prices create uncertainty for EU food producers, although national energy support measures reduce the impact and shield production. Nonetheless, food producers need to reassess their energy strategies because mandatory cuts in energy use can't be ruled out this winter and concerns about longer-term gas supply continue to linger A considerable increase in energy costs for food and beverage manufacturers Back in 2019 when energy markets were still calm, energy had a 2% share in the total costs of food manufacturers in the EU. Given the sharp increase in energy prices, we estimate that the share currently ranges between 7.5-10% (without price caps or compensation). There are also many signals that some food manufacturers have seen their energy bills rise to up to 30% of their total costs. In food processing, activities such as flour milling, baking and fruit/vegetable/potato processing are relatively energy intensive. At this stage, there are large differences between what companies are paying for energy because some still have longer-term fixed contracts, while others had to renew their contracts at much higher rates. Companies that locked in energy prices before 2021 and companies that use other energy sources than gas for generating heat are certainly in a more favourable position. However, differences will become less pronounced in the months ahead as older, lower-priced contracts and lucrative hedges expire and government support measures level out some variances. The Netherlands is an example of how energy costs have become a burden for food producers Energy costs as a share of total costs in food and beverage manufacturing Source: CBS, *estimate ING Research Food manufacturers feel the pinch from second-round effects Besides the direct impact on costs, there is also a pass-through of higher energy prices towards food and beverage makers as they procure many inputs from agriculture and because they need transportation. Agriculture is generally quite energy intensive (see this previous article), and this is especially the case for horticulture under glass and mushroom growing. Energy represented 25% of total costs in Dutch horticulture in 2021 and, based on energy prices in 2022, that share has gone up to more than 60%. When prices of agricultural products go up due to higher energy costs, the food industry has to deal with this as well. This article looks specifically at energy but it’s good to keep in mind that cost increases for packaging materials, agricultural inputs and labour all add to the cost pressure. Energy support measures also help to sustain food production Do we see any signs of a reduction in food production in the EU because of high energy prices? Thus far, food manufacturing output has proven to be quite resilient, aided by the ability to pass on (some of) the higher costs to customers and consumers. This pass-through is illustrated by current double-digit levels for food inflation in the EU (read more in this article). Still, food production data up until August show that production volumes in the food and beverage industry in the EU are higher this year compared to 2021. The long-term trend shows that output volumes are generally not very susceptible to external shocks, apart from a considerable drop at the start of the Covid-19 pandemic. Currently, we see two mechanisms that help to safeguard EU food production. First, international trade and substitution allow food processors to keep facilities running in case European agricultural supplies fall short. High energy prices haven't led to such a situation yet, but earlier this year trade helped to keep up production of spreads and frozen potatoes amid shortages of Ukrainian sunflower oil. Second, food producers also benefit from government support measures aimed at cushioning the impact of high energy prices on companies and consumers. Examples of recent measures that benefit companies include the reduced VAT rate for electricity and gas in Belgium and the Compensation Energy Costs (TEK) in the Netherlands. Meanwhile, measures aimed at consumers are beneficial because they prevent drastic cuts in expenditure on basic needs such as food. EU countries opt for a range of measures to reduce the burden on companies Selection of government support measures in several countries Source: Bruegel, VRT, FAZ, NOS, ING Research Not all support measures are created equal The introduction of all sorts of national energy support measures for companies will temporarily distort competition in multiple ways. This is very relevant as food and beverage is a major export category accounting for almost 270bn euros or 8% of all intra-EU trade. Hence, calls from food industry associations to maintain a level playing field have become louder over the last couple of months. However, differences between countries are likely to grow as some countries have more fiscal room than others. The longer the energy crisis and subsequent support measures last, the greater the chance that they will determine to some extent which companies will weather this storm best. How support measures distort competition in several ways Source: ING Research Energy costs add additional pressure to EU commodities exports In our base case scenario, energy prices in Europe will stay at relatively high levels for several years. Assuming energy support measures to be temporary means that the competitiveness of European food products in global markets will deteriorate to some extent. Still, global demand for calories is strong due to population and welfare growth, although affordability is a growing issue. Our expectation is that the general competitiveness of more premium products such as infant formula, beer or frozen fries will be impacted less. But for staple products such as milk powder, olive oil and pig meat, the EU Commission’s Agricultural Outlook has already signalled a decline in 2022 export volumes. This is attributed to a variety of reasons including high energy, feed and fertiliser costs, plus drought and animal diseases. So while higher energy prices are a factor impacting extra EU exports, it’s not the only factor. On the other hand, the strengthening of the dollar is a driver in the opposite direction and is currently supportive of EU exports. Chance of mandatory gas and electricity rationing poses a major risk Out of seven major EU food-producing countries, the importance of gas as a source of energy is highest in Benelux (Belgium, the Netherlands, and Luxembourg) and lowest in Spain and Poland. On top of that, a large part of the electricity supply in the Benelux comes from gas-fired power plants. Although concerns about gas supplies during this winter have eased somewhat, the possibility of gas rationing is a serious downward risk for companies that use gas for generating heat in their production processes, especially if they have limited options for fuel switching. Food processing plants that use other energy sources, such as coal, oil or woodchips, are currently better positioned and often run at full capacity even though their energy inputs are generally less sustainable. Another risk is that EU member states are supposed to reduce electricity demand during peak hours between 1 December 2022 and 31 March 2023. This could force companies to shift more production toward night or weekend shifts or reduce output in case this is not possible. Food and beverage makers in the Netherlands and Belgium are most dependent on gas Used energy sources in terajoule in the food, beverage and tobacco industry, 2019 Source: Eurostat, ING Research High energy costs will lead to some substitutions on our plate Elevated energy prices add to food inflation and the current level of food inflation leads to various shifts in food consumption. Such shifts range from an increase in shopping at discounters and higher market shares for private label products to a rebalancing between portion sizes of expensive protein and less expensive carbohydrates in restaurants. The impact of high energy prices might be best visible in the fruit and vegetable section in supermarkets. Here there will be all sorts of substitution effects on display this winter. Due to more energy-intensive processing, conserved and frozen vegetables are becoming less competitive compared to fresh vegetables. On top of that, growing tomatoes, cucumbers and peppers has become a lot less attractive this winter for many horticulture growers in northwestern Europe. If they leave their greenhouses empty, retailers are likely to source more vegetables from growers in Spain, Italy, Morocco and Turkey. These products need less energy to grow, but still require more expensive diesel to transport. In turn that could mean that some consumers will revert to other types of vegetables that provide more value for money. Prices for processed vegetables have increased more than for fresh vegetables Dutch consumer price index 2015 = 100, monthly data Source: CBS, ING Research The situation creates a need for companies to reassess energy procurement and related investments Contingency planning is likely to be a major talking point in strategy discussions for 2023 and beyond. For food manufacturers, reducing their output on short notice is often not easy. This is especially true for companies that have contracted a certain volume of agricultural inputs or for cooperatives that are obliged to purchase milk, animals or crops from members. On top of that, if they reduce output they risk losing contracts and customers which is an even bigger threat to business continuity. While EU farmers are considered to have more flexibility in deciding to reduce production, they generally have high fixed costs meaning that even in unfavourable market conditions they will often decide to ‘plough on’. Follow-up actions that food manufacturers take to cope with high energy prices: Optimise energy use and energy costs: this can be done with additional measures to save energy or by shifting some production to facilities with the lowest energy costs. The latter only works for larger companies with multiple sites that have spare capacity, and only if transport costs allow it. Adapt contracts to reduce energy price risks: price escalation clauses can be a way to pass on energy price increases to customers, but often only work when customers are very dependent on a certain supplier or are working with strategic partnerships focused on long-term continuity. Fuel switching in production processes to reduce dependency on gas: increase of own energy production. For example, with investments in solar panels or biogas installations. Increase electrification efforts: for example, through the installation of electric boilers or heat pumps. In some cases, companies have plans in place but are faced with local capacity constraints on electrical grids. Why it's wise to prepare for another difficult winter in 2023/24 This year, the EU has been able to fill gas storage to the current levels partly because there has still been Russian gas available. Futures markets now seem to be concerned about next winter and Europe’s ability to build stocks without the Russian gas supply. In the event of an ongoing supply squeeze, it can be a burden for food manufacturers with many newer or retrofitted food production plants having been catered to run on gas over the past decade. Such concerns provide a clear incentive for food companies to rethink their longer-term energy strategies, including aspects such as contracting energy supply, the optimal energy mix and related investments. Read this article on THINK TagsInflation Food & Agri European Union Energy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The S&P500 Rallied Past Its 2022 Bearish Trend Top

The Q3 Earnings Season Has Been Bad | Cyber Security Stocks Has Bad Week

Saxo Bank Saxo Bank 06.11.2022 09:43
Summary:  The cyber security industry is still growing fast with revenue up 26% from a year ago, but this week's earnings releases from cyber security firms have been an ugly affair with the outlook disappointing. Our cyber security basket is down 11% over the past week as market expectations have clearly been too high relative to what the industry can deliver in the short-term. In today's equity note we also cover next week's earnings releases which will shift to a lower gear as the Q3 earnings season is fading. The most exciting earnings next week are from Activision Blizzard, Walt Disney, Adidas, and ArcelorMittal. A nasty week for cyber security stocks as earnings focus fades The past week has been brutal for cyber security stocks, one of our most popular equity theme baskets, down 11% despite Q3 earnings hitting estimates and maybe a slight hint of growth slowing. Our cyber security basket is down 38% from the peak compared to only 22.5% for the MSCI World as higher equity valuations have made cyber security stocks more vulnerable to higher interest rates, but since 2015 the returns on cyber security stocks have still been much better and we expect the long-term return over 10 years to exceed that of the overall equity market based on high demand for cyber security services and products amid the ongoing war in Ukraine and rising geopolitical tensions. If we look at our basket we can see that among the big players it was Fortinet that saw the biggest hit down 20% over the past week. The company’s Q3 revenue and EPS were both above estimates while fiscal year billings, the forward looking indicator on sales, were revised down a bit, but even worse the company said that it will stop providing this metric in the future. These decisions are often viewed badly by investors as it indicates that the company’s growth is slowing down. Among the minor players in the industry, Varonis Systems shares were down 37% over the past week as the Q4 outlook on revenue at $139-142mn missed estimates of $156mn. So while industry growth is still high at 26% compared to a year ago market expectations are clearly too high at this point acting as headwinds on price performance. The Q3 earnings season has been bad relative to expectations with S&P 500 earnings missing estimates (see chart) as margin pressures have been more intense than expected by analysts offsetting the higher revenue growth. The most intense margin pressure has been observed in industries such as media & entertainment, banks, utilities, semiconductors, and real estate, while industries such as energy, insurance, transportation, retailing, and software have all maintained or expanded their operating margin. Next week’s earnings releases The Q3 earnings season is shifting into a lower gear now but next week will still offer plenty of interesting earnings releases. On Monday our focus is Activision Blizzard which is struggling with negative top line growth like the rest of the gaming industry as the pandemic boom is over. Analysts are expecting revenue growth of -17% y/y and EPS of $0.50 down 39% y/y. Walt Disney is next week’s biggest earnings release scheduled on Tuesday with analysts expecting Q4 (ending 30 September) revenue growth of 15% y/y but EBITDA at $3bn down from $3.86bn in Q3 highlighting the ongoing margin pressure. Adidas, reporting on Wednesday, is also key due to its size in consumer goods but also because of its costly partnership breakup with Ye; analysts estimate revenue growth up 13% y/y but EPS at €1.24 down 47% y/y due to one-off items. On Thursday, we will focus on ArcelorMittal, because Europe’s largest steelmaker is an important macro driver, and analysts are getting increasingly negative on the steel industry expecting ArcelorMittal to announce a 14% drop in Q3 revenue and 66% drop in EPS. The week ends with Richemont expected to see revenue growth coming down fast to just 7% y/y in Q3. Monday: Westpac Banking, Coloplast, Ryanair, Activision Blizzard, BioNTech, Palantir Technologies, SolarEdge Technologies Tuesday: Bayer, Deutsche Post, KE Holdings, Nintendo, Walt Disney, Occidental Petroleum, Lucid Group, DuPont Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Source: https://www.home.saxo/content/articles/equities/earnings-season-fades-with-cyber-security-stocks-in-big-plunge-04112022
Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

Gas And Power Prices Need To Normalise For The Production Of Synthetic Fuels To Take Off

ING Economics ING Economics 24.11.2022 12:13
Corporate leaders are looking at how synthetic fuels can set their companies on a path to net zero emissions. This is far from easy as they are faced with economic and environmental trade-offs. That’s why we have presented eight insights to help them get it right. Hydrogen's exposure to the energy crisis and the 'greenness' of hydrogen are big challenges In this article Eight insights for corporate decision-makers Synthetic fuels offer a key pathway to a net zero economy Synthetic fuels provide corporate decision-makers with a tool to go beyond carbon offsetting Hydrogen production has not been immune to the energy crisis At current carbon prices green hydrogen is not cost competitive with grey and blue hydrogen Green hydrogen is currently also more expensive than fossil fuels It is not economical to produce green hydrogen only at times when solar and wind power are in abundance Green hydrogen produced with electrolysers is not necessarily green(er) A future for hydrogen: technological progress helps, but gas and power prices need to come down first Conclusion   Eight insights for corporate decision-makers Despite all the buzz around synthetic fuels and government support for it (for example in the US and the Netherlands) the economics are far from easy. High gas and power prices have worsened the business case lately, especially in continental Europe. At the same time, synthetic fuels are positioned as a way to replace Europe’s gas and oil dependency in the future and as a means to radically reduce emissions.   In this article, we analyse the role of synthetic fuels in a net zero economy and unravel the economic value drivers of the hydrogen business case, which is the most promising and best-known fuel. We take a European perspective. In doing so, we present eight key insights for corporate decision-makers in energy-intensive companies that can help them build the case for synthetic fuels. But first things first; what are synthetic fuels?   What are synthetic fuels? Synthetic fuels are liquid fuels that have the same properties as fossil fuels but are produced artificially in a non-fossil way. Synthetic fuels are entirely produced in a factory or chemical plant environment, rather than extracted from the earth and therefore, ideally, do not involve oil, coal or gas mining. So while hydrogen can be produced from natural gas (which is extracted), it can also be produced by splitting water with an electrical current (which is a chemical process called electrolysis). Both types of hydrogen share the same features and applications, but the one that splits water into hydrogen and oxygen is entirely free of fossil fuels if it is produced fully with renewable power. If so, its use does not create carbon emissions. Synthetic fuels can also be made from syngas, which is a combination of carbon oxide (CO) and hydrogen (H₂). Reacting these two substances under specific conditions (temperature, pressure and catalyst) results in synthetic fuels such as gasoline, diesel, gas, or even kerosene. Electrolysis and syngas reactions are both chemical processes that yield synthetically produced fuels instead of fossil fuels that are extracted from the earth. 1Synthetic fuels offer a key pathway to a net zero economy Corporate decision-makers around the world have been encouraged by government pledges to reduce greenhouse gas emissions to net zero by mid-century and the financial incentives that come with it (think of hydrogen subsidies and infrastructure). According to the International Energy Agency (IEA) around 70% of global carbon emissions are now covered by net zero pledges. As a consequence, the use of synthetic fuel needs to increase in energy-intensive sectors towards 2050, particularly in transportation. Synthetic fuels are likely to grow towards 2050, particularly in transportation Share of synthetic fuels in the global sector energy mix in the IEA Net Zero Scenario ING Research based on International Energy Agency   According to the IEA, synthetic fuels are not the holy grail to decarbonising energy-intensive sectors in the sense that they alone will fully substitute fossil fuels and reduce emissions. Other technologies such as electrification, bioenergy and carbon capture and storage also play an important role. But, synthetic fuels certainly add to the solution, especially in transportation sectors like aviation and shipping. They can become one of the many building blocks of a net zero economy, provided that corporate leaders, politicians and scientists get the business case and technologies right. That’s why this article unravels the economic drivers of the business case. 2Synthetic fuels provide corporate decision-makers with a tool to go beyond carbon offsetting The climate strategies of carbon-intensive companies often rely heavily on carbon offsetting strategies. But these come with many drawbacks and enable companies to continue to emit vast amounts of emissions as long as they pay someone else around the globe to make up for it, for example, by planting trees or preserving existing forests. A growing number of corporate leaders are now fundamentally rethinking their climate strategies and aiming to become net zero emitters by 2050, according to the Science Based Target Initiative. The key is to radically reduce the company’s carbon emissions, even if this requires a fundamental change to the way they do business. Synthetic fuels are an example of fundamental change, as these can be used in many sectors without creating local emissions. For example, only water vapour is emitted by burning hydrogen in ships, aeroplanes, trucks or cars. The same applies to burning hydrogen in factories and houses to generate heat. So as long as the production of hydrogen is low in emissions (think of green hydrogen production with electricity from wind, solar, hydro or nuclear plants), the lifecycle emissions of hydrogen are much lower than fossil fuels. Synthetic fuels, like hydrogen, have gained a cult status among many industry leaders and politicians as a result. In the remainder of this article, we focus on hydrogen as it is the best-known synthetic fuel and can be applied in many sectors. Hydrogen is the best known synthetic fuel and can be used in many sectors Potential use of different synthetic fuels in sectors ING Research 3Hydrogen production has not been immune to the energy crisis Hydrogen production comes in three forms with a colour attached to each of one. Grey hydrogen is produced from natural gas and the emissions are not captured and stored. Hence the gas and carbon price are the main value drivers of the business case. That is also the case for blue hydrogen where most emissions are captured and stored. As a result, the business case of blue hydrogen is less impacted by the carbon price. Finally, green hydrogen is made with electrolysers that run on electricity. Therefore, the power price is the major value driver of the business case for green hydrogen. To sum up, hydrogen is made with natural gas or electricity where prices change over time, particularly during an energy crisis such as the one seen in Europe this year. Cost of hydrogen production depends on gas and power prices Indicative unsubsidised cost of hydrogen in Europe per kilogram at a carbon price of 75 €/ton ING Research   The energy crisis has had a severe impact on hydrogen production costs through higher natural gas and power prices, particularly in Europe. In the Netherlands and Germany for example, the cost of hydrogen production has skyrocketed as gas prices went from an average 20 €/MWh in the years before the crisis to a peak of 350 €/MWh this summer. Power prices increased from 40 €/MWh to a peak of 700 €/MWh in the Netherlands and even 1,000 €/MWh in France. The cost to produce hydrogen reached record levels on the back of skyrocketing energy prices and hydrogen production was scaled down as a result. For example, Yara produces hydrogen out of natural gas for its ammonia and fertiliser production and curtailed production at its Ferrara (Italy) and Le Havre (France) plants. Energy crisis pushes hydrogen production costs higher Indicative cost of hydrogen production in Europe in €/kg at realised TTF-gas and APX-power prices ING Research based on energy prices from Refinitiv   Both gas and power prices have fallen rapidly recently. Ample LNG supply could not be stored as gas storage facilities in Europe are almost completely filled. On the demand side, the heating season has not kicked in as weather temperatures have been unusually high for this time in the season. This combination of lower-than-expected demand and ample supply caused gas process to fall below 50 €/MWh and power prices below 100 €/MWh. Still, the market expects this to be short-lived. The futures markets indicate gas prices of around 125 €/MWh throughout the winter and power prices of over 300 €/MWh depending on the month of delivery. Hydrogen production costs will move again towards 5-6 €/kg for grey and blue hydrogen and around 15 €/kg for green hydrogen if these expectations materialise.   Although hydrogen is often touted as a solution to becoming less dependent on fossil fuels, the economics are still driven by the gas market. This also holds for green hydrogen as gas is likely to remain the price-setting technology in many power markets in the coming years. 4At current carbon prices green hydrogen is not cost competitive with grey and blue hydrogen In Europe, carbon prices are the main mechanism that drives the environmental competitiveness of the three types of hydrogen. Before the energy crisis, blue hydrogen in general was cost competitive with grey hydrogen at a carbon price above 60 euro per ton CO2. That provided hydrogen producers with an incentive to apply carbon capture and storage (CCS) to hydrogen production and it was expected that they would switch from grey to blue hydrogen production once CCS infrastructure was in place. That no longer holds for current gas and power prices. In fact, grey hydrogen is currently the cheapest form of hydrogen at any carbon price below 150 euro per ton CO2. And green hydrogen is almost three times as expensive as grey and blue hydrogen at the current carbon price and state of technology. Despite initiatives to strengthen the European carbon market, fears of a recession are likely to continue to weigh on carbon prices. With high energy prices, the carbon market won’t offer a decisive push towards less polluting blue and green hydrogen. Grey hydrogen is the cheapest form of hydrogen production at current carbon prices Indicative unsubsidised production costs* of hydrogen in Europe in €/kg for different carbon prices   The public debate for a net zero economy often assumes that hydrogen production will be green, both explicitly and implicitly. Governments also tend to focus on green hydrogen in their vision for a hydrogen economy or net zero pathway. But production of green hydrogen in Europe cannot compete with blue and grey hydrogen at current energy and carbon prices. 5Green hydrogen is currently also more expensive than fossil fuels At current market prices, green hydrogen is also not cost competitive with fossil fuels. Based on the energy content of fuels, green hydrogen is more than twice as expensive as coal and gas and almost seven times as expensive as oil. Fossil fuels are not only cheaper, they are also performing better on important chemical characteristics, such as voluminous energy density. Many synthetic fuels, like hydrogen, are very light and voluminous substances, so they require a lot more space to store and use. That puts them at a disadvantage over fossil fuels when used in aviation, shipping, trucking and cars when it comes to the adjustments of the vehicles (large storage tanks) and the infrastructure required to run on these alternative fuels. Fossil fuels are still cheaper, particularly compared to green hydrogen Indicative unsubsidised production cost* of energy carrier in Europe in euro per GigaJoule ING Research based on energy prices from Refinitiv   Corporate decision-makers in energy-intensive companies are exploring the option of synthetic fuel to reduce emissions and get to net zero. This does not mean green hydrogen will win out, however, as companies have to manage costs, too. In practice, green hydrogen will be in competition with other fuels. Fossil fuels are considerably cheaper and even within the hydrogen space, grey and blue hydrogen are cheaper. The adaptation of green hydrogen in the coming years will largely depend on the extent that governments are inclined to subsidise the price gap to help the industry scale. 6It is not economical to produce green hydrogen only at times when solar and wind power are in abundance Solar panels and wind turbines are perceived as the pillars of the electricity mix in a net zero economy. Green hydrogen production is often presented as a solution to absorb an oversupply of solar and wind power on windy and sunny days when power prices are low. That could well be the case from a technical point of view. However, from an economic perspective electrolysers need to run all year round, 24/7, in order to reduce hydrogen costs. Moments of surplus wind and solar power are still quite rare, even in power systems dominated by solar panels and wind power. Experts indicate that it is limited to 5% in 2030 and 20% of the time in 2050. If one runs electrolysers only in times of surplus solar and wind power, hydrogen production costs would increase by 2 €/kg (+17%) in the current market environment with high power prices. The economics and runtime of electrolysers are even more important in normal market conditions. At historic power prices of 40 €/MWh, an electrolyser that operates on low runtimes (around 20%) produces hydrogen that is twice the cost (+100%) when the electrolyser runs all year round (95% runtime). Higher electrolyser load factors lower hydrogen costs Indicative unsubsidised production cost* of green hydrogen production in Europe for different runtimes of an electrolyser (load factor) in €/kg/H2 ING research   There is another reason why solar panels and wind turbines are mentioned a lot with respect to green hydrogen. Why would one pay high market power prices of 300 €/MWh or more, when the life cycle cost of electricity from renewable assets is often well below 100 €/MWh? The power costs are much lower if an owner of an electrolyser invests in solar panels or wind turbines to directly power the electrolyser. And this is a valid question too if one buys electricity from the power markets, now that the European Commission has capped the power price from renewables at 180 euro/MWh in the day ahead market. Renewables offer a way of becoming less dependent on high market power prices. But, capitalising on lower power prices from renewables is difficult for three reasons; Increasing the runtime of electrolysers often also requires the use of grey power from the grid (see above). The proposed price cap only applies to the day-ahead market on which approximately 20-30% of the power is traded. So, most of the power is not subject to the price cap. European power generators, also the ones with solar and wind assets, tend to pre-sell about 80% of their future power production in one-year ahead futures contracts or through Power Purchase Agreements (PPAs). PPAs are designed to buy green power at fixed prices for longer periods, so hydrogen producers can use PPAs to lower power costs. That works in theory. In practice, PPAs are often linked to a power price index, so power prices from renewables still go up in times of crisis. And the length of PPAs is typically only a couple of years, so it is hard to fix the power price at the levelised cost over the entire lifecycle of the electrolyser, which lasts about 20 years. Clean power is much cheaper compared to current market prices, also because some of it is capped by the EU Indicative unsubsidised cost* of low carbon power sources in Europe in €/MWh ING Research based on Bloomberg New Energy Finance (BNEF)   Corporate decision-makers face a trade-off in the economics of electrolysers between high fixed costs at low load factors and higher electricity costs at high run times. Ideally, one would like to run electrolysers on clean power from solar panels and wind turbines at all times. But an electrolyser that only runs on cheap power from renewables is simply not economical as it cannot recoup the high capital costs. The economics of an electrolyser incentivise corporate decision-makers to maximise the run time of an electrolyser to lower the cost of green hydrogen. This often requires that electrolysers are also run by power from the grid, that at times may not be so green and powered by gas or coal-fired power plants. Sourcing renewable power through Purchasing Power Agreements in practice is only a partial solution. 7Green hydrogen produced with electrolysers is not necessarily green(er) Powering electrolysers to produce hydrogen requires a great amount of electricity. As aforementioned, electrolysers must run constantly in order to lower production hydrogen costs. In practice, this means that electrolysers run on power from the grid too, especially at times when the sun is not shining and the wind is not blowing. This could come with the downside of higher emissions, as power from the grid can be generated from coal or gas-fired power plants. Grey hydrogen emits approximately 8.1 kilograms of CO2 per kilogram of hydrogen. When corporate decision-makers decide to use green hydrogen instead, they must carefully analyse whether this will lead to a decrease in the company's emissions. This is not an issue if one uses nuclear or hydropower (think of connecting an electrolyser to the grid in France or Norway). Green hydrogen will have lower emissions compared to grey hydrogen, even if the electrolyser is fully powered by the grid. However, in countries with a lot of coal-fired power plants (like Poland), green hydrogen only comes with lower emissions if more than 85% of the power comes from renewables, which is unrealistically high. In countries with a lot of gas-fired power plants (like the Netherlands) hydrogen produced with electrolysers only comes with lower emissions compared to grey hydrogen if approximately 60% or more power comes from renewables. A countries’ power mix determines whether green hydrogen comes with lower emissions than grey hydrogen Indicative emission intensity in kgCO2/kgH2 for hydrogen produced with electrolysers in Europe for different amounts of power they take from the grid ING Research   So in order for green hydrogen to be truly green, a vast amount of renewable power is needed. It is estimated that global hydrogen production by 2050 would require 18 times the amount of current solar power and eight times the amount of current global wind power.   Corporate decision-makers face an incentive to run electrolysers 24/7 year-round to minimise the cost of hydrogen. That requires the use of grid power which could make green hydrogen more polluting than grey hydrogen. Sourcing green power from an energy company looks good on paper, but still requires the electrolyser to run on ‘dirty’ grid power at times when the sun is not shining and the wind is not blowing. In practice, the emissions level of green hydrogen changes continuously based on the type of electricity that is used. A company’s decision to use green hydrogen should always be accompanied by decisions about a company’s power mix in order to guarantee a positive climate impact. In other words: company leaders have to tackle hydrogen emissions before they can position hydrogen as a viable net zero solution. This is the reason why the European Commission is setting standards and labels for green hydrogen. 8A future for hydrogen: technological progress helps, but gas and power prices need to come down first While hydrogen is currently very expensive, especially in Europe, there are two main drivers that are likely to significantly reduce the cost towards 2050. Like every crisis, the current energy crisis won’t last forever. Experts from Bloomberg New Energy Finance and Aurora Energy Research expect European gas and power prices to find lower equilibrium levels from 2025 onwards. That’s well before 2030, the year that many government policies target the hydrogen economy to really take off. The energy crisis does have a long-lasting impact though as long-term gas and power prices are expected to be 75% higher compared to past averages. Technological progress will reduce the cost of electrolysers and increase electrolyser efficiency. According to Bloomberg New Energy Finance, investment costs for PEM electrolysers will drop by over 90% towards 2050, from 1200 €/kW today to just 95 €/kW by 2050. Also, electrolyser efficiency is expected to increase from an average of 70% today to 80% by 2050. Electrolysers will use less power to produce a kilogram of hydrogen in the future as a result. Electrolyser technology is still in its infancy but is expected to see similar cost declines as solar panels and wind turbines have shown in the past. Lower gas and power prices are the main source of declining hydrogen costs Indicative unsubsidised levelised cost of hydrogen in €/kg (real prices) ING Research based on Refinitiv, IEA, BNEF and Aurora   Before the energy crisis, IRENA estimated that by 2050, hydrogen production costs in the northwest European region would be around €1.0-€2.0/kg. That seems no longer the case if the current energy crisis has a long-lasting impact on energy prices. According to Bloomberg New Energy Finance and Aurora, new equilibrium levels for gas and power prices are likely to be 75% higher compared to pre-crisis levels. In such a world, hydrogen production costs will be more in the range of 2.5-€3.0/kg, with green hydrogen still being the most expensive option. But predicting gas and power prices is notoriously difficult. The energy crisis might also speed up the energy transition and phase out fossil fuels much faster, which might lower long-term gas and power prices. The IEA hints in that direction in its 2022 World Energy Outlook. That’s why we will monitor energy markets closely in the years ahead and continue to assess the impact on the economics of synthetic fuels.   Before the start of the energy crisis, innovation was considered the biggest driver of lower hydrogen costs towards 2050. It still has a role to play, but lower gas and power prices have a much bigger impact now that Europe is facing an unprecedented energy crisis. Conclusion Currently, the production and use of synthetic fuels like hydrogen are often done by one company or within a specific cluster of companies in the chemical sector. Unfortunately, this is far from easy as producers are faced with many economic and environmental trade-offs, such as high energy prices, high technology costs and a shortage of renewable power. That’s why we’ve presented eight insights that corporate decision-makers need to know about synthetic fuels, so they can make them work. Our analysis shows that gas and power prices need to normalise for the production of synthetic fuels to take off. Now corporate leaders in many other sectors are looking at how synthetic fuels can set their companies on a pathway to net zero emissions by 2050. The use of synthetic fuels: holds the potential to fundamentally change the business towards net zero emissions; provides energy-intensive businesses a license to operate in a low-carbon world and gain support from society could reduce fossil fuel dependency and supply chain disruptions. In future articles, we will shift the focus from the production side of synthetic fuels towards the use case of synthetic fuels in transportation, manufacturing and buildings.
The Elasticity On Supply Of Fossil Fuels Is Low And The Green Transformation Is Accelerating Electrification

Alberto Gandolfi Statement About Renewables Energy Sources| What To Expect From 2024?

Kamila Szypuła Kamila Szypuła 30.11.2022 11:35
Markets are constantly changing, economic and political situations exert influence on them. Understanding them is very important, and getting acquainted with important events or statements about their team can help in making decisions. In this article: What can bring 2024? UBS Year Ahead 2023 Renewables in Europe The housing market The price of energy insecurity 2024 ahead and what else? Morgan Stanley tweets about the difficulties facing Europe next year. As we head into a new year, Europe faces multiple challenges across inflation, energy and financial conditions, meaning investors will want to keep an eye on recession risk, the ECB, and European equities. https://t.co/0Wtj18Dmbj pic.twitter.com/ImPUGRiuhd — Morgan Stanley (@MorganStanley) November 29, 2022 The new year is approaching. Everyone plans changes, makes resolutions. However, this does not change the fact that the economic situation or the economy will change so suddenly. Therefore, when making their plans, especially Europeans, they should take into account how the geopolitical and economic situation may affect them. And to make this possible, it is worth getting acquainted with the possible scenarios for the next year. We can expect that the fight against inflation will continue, and difficulties on the energy market will also be an important aspect of economic decisions of countries. Stocks and bonds UBS discusses stocks and bonds in their tweet. Is the worst over for stocks and bonds? Or will the years ahead remain challenging? Find out what we think will drive markets in the decade ahead in our UBS Year Ahead 2023: https://t.co/pro4XIuBiG#shareUBS pic.twitter.com/dzcbPOfp7f — UBS (@UBS) November 30, 2022 There is no doubt that the stock and bond markets have had a crazy year. Investors, analyzing the situation, wonder whether the stock and bond markets can expect an improvement or rather a deterioration of the situation. UBS analysts are also looking at this. Their opinion is presented in UBS Year Ahead 2023, and getting to know its results can help investors. Renewables in Europe Goldman Sachs tweets about renewables in Europe. Our head of European utilities research, Alberto Gandolfi, discusses Europe's headstart when it comes to renewables in the utility sector at our #Carbonomics Conference. Listen here: https://t.co/6r5Au9dZ70 #GSsustainability — Goldman Sachs (@GoldmanSachs) November 29, 2022 Alberto Gandolfi, head of utilities at Goldman Sachs, speaks to CNBC’s Steve Sedgwick at the Goldman Sachs Carbonomics event in London mostly about renewables in Europe. According to him, Europe has great potential in this area. The fight for a better tomorrow for future generations is still going on. Renewable energy sources are an important aspect of this. While all non-renewable energy sources: coal, gas or oil, will eventually run out and their further extraction will be impossible, energy obtained from renewable sources is a permanent and reliable source that will never run out. Thanks to this, we can count on safe and predictable energy supplies, without risk. Real estate market Morningstar, Inc. tweets about the real estate market. As the housing market moves into uncharted territory, advisors can help clients feel more comfortable making big financial decisions like buying their first home or refinancing their current one. Join us on December 8th: https://t.co/t5cDNyfB3G #AdvisorPracticeAccelerator pic.twitter.com/ZQ5daEeAJu — Morningstar, Inc. (@MorningstarInc) November 29, 2022 The housing market is important not only for the economy but also for potential buyers. Getting acquainted with it, better understanding it may help in making investment decisions. As the value of the property changes, opportunities arise and advisers can put this knowledge into practice. The price of energy insecurity IMF tweets about the price of energy insecurity. Europe is learning the hard way what happens to an economy tethered and dependent on fossil fuels, writes Bob Keefe. Read our latest Finance & Development for more on the price of energy insecurity: https://t.co/CqabcSqcQw pic.twitter.com/ZpfCi22opn — IMF (@IMFNews) November 29, 2022 Climate change is an environmental issue. This is also clearly an economic issue, and at the heart of the economics of climate change is energy security. The rippling impacts of climate change and the effects of energy security have been sweeping through the global economy throughout 2022, leaving few safe havens from the climate-related economic storm. especially when the supplies are controlled by the Russian dictator. Of course, energy insecurity – and the economic disasters it causes – is just one of the countless side effects of climate change hitting our wallets. How to fix it? Are renewable energy sources the answer? Find out from this tweet.
Agricultural Commodities Markets Are Going To Remain Sensitive To Developments In The Russia-Ukraine War

Agricultural Commodities Markets Are Going To Remain Sensitive To Developments In The Russia-Ukraine War

ING Economics ING Economics 30.11.2022 14:04
2022 has been an extraordinary year for commodity markets. Supply risks led to increased volatility and elevated prices. However, demand concerns have taken the driving seat as we approach year-end. 2023 is set to be yet another year of uncertainty, with plenty of volatility Shutterstock   Russia’s devastating invasion of Ukraine has been a key driver for commodity prices this year. Russia’s willingness to use energy as a weapon and retaliatory sanctions on Russia from the West have had an impact not just on the commodities complex, but the broader global economy. As a result, what started out as concern over supply has now moved more towards growing demand risks as central banks around the world tighten monetary policy in a bid to rein in rampant inflation. Clearly, the longer and more restrictive policy is from central banks, the more downside there is to demand. In addition, whilst much of the world has finally moved on from Covid, key commodity consumer, China, continues to follow a zero-Covid policy. While the government eased quarantine restrictions in recent months, China is facing its largest outbreak of Covid since the start of the pandemic, which clearly does not help the demand picture. In addition to the impact of Covid restrictions, the metal-intensive property market in China remains very weak. Up until now, support from the government has had little impact. It is yet to be seen how helpful the latest measures from the government will be. We will be entering 2023 with markets trying to gauge the demand impact from slowing global growth. It is clear that a number of key economies will enter recession, the big question is how severe. When you couple these concerns with the ongoing weakness in China it is likely that demand will continue to dictate price direction through the early part of 2023. A turning point for the complex would likely be when we see the US Federal Reserve pivoting towards a more accommodative policy (which would also suggest we have seen the peak in the US dollar), but for that to happen, we need to see some clear evidence of a significant fall in inflation. While demand risks are in the driving seat for now, supply risks have certainly not disappeared. In fact, these risks are growing for 2023, particularly when it comes to energy. For oil, the global market will need to see a further change in trade flows as the EU ban on Russian crude oil and refined products comes into force. While other buyers will be keen to pick up discounted Russian oil, their ability to do so is likely limited, which suggests that we see Russian oil supply falling over the course of 2023. This coupled with OPEC+ supply cuts suggest a tighter oil market. Therefore, prices should strengthen over the course of the year. The European natural gas market has seen a massive amount of disruption this year, as Russia cut off the bulk of supply to the region, leading to significant volatility and record-high prices. Demand destruction along with increased LNG imports have helped offset Russian supply losses. For 2023, the EU will likely find it much more difficult to refill storage to adequate levels ahead of the 2023/24 winter. Russian supply losses will be more pronounced and there are limits to how much more LNG Europe can import. Therefore, we will need to see continued demand destruction through 2023. In order to see this demand destruction, prices will have to remain at elevated levels. Tightness in the market also means that volatility is not going to disappear anytime soon.  Metal balances are looking more comfortable for 2023. Supply growth and demand weakness should ensure this. These more comfortable supply and demand balances along with poor sentiment suggest that most metal prices will remain under pressure in the early part of 2023. We are more constructive as the year progresses though on the back of low inventories for a number of metals, expectations that we start to see monetary loosening and a modest recovery from China. Furthermore, there are still clear supply risks for a number of base metals. Up until now, Russian metals have avoided sanctions but clearly, there is always the risk that these are targeted at a later stage.  As for gold, the outlook is fairly constructive. We believe that as soon as we see any signs from the US Federal Reserve of a pivot, that this will provide solid support to prices. Agricultural commodities have also seen significant strength this year, particularly grains, due to the disruption in Ukrainian exports along with poorer weather in a number of key growing regions. These markets are going to remain sensitive to developments in the Russia/Ukraine war. However for now, we believe risks are skewed to the upside. There are some early signs that the winter wheat crop in some key growing regions will be smaller next season, whilst clearly for agri crops in general, yields could suffer due to less application of fertilisers, given the strength in the market this year. Overall, we believe in the short term that there is further downside for commodity markets. However, as we move towards the middle of the year, and once the worst of the demand worries are behind us, supply concerns are likely to take centre stage once again, which should push prices higher.   TagsRussia-Ukraine Metals Energy Commodities Outlook 2023 Agriculture Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Credit Q&A: where do we go from here?

Only Market-Driven Prices Can Deliver Improved Productivity And Efficiency

Saxo Bank Saxo Bank 06.12.2022 09:39
Summary:  "In a war economy, the government hand will expand mercilessly as long as price pressures threaten stability." - Steen Jakobsen. Inflation will remain a challenge to control as long as globalisation continues to run in reverse and long-term energy needs remain unaddressed.   Nearly all wars have brought price controls and rationing, seemingly as inevitable as battle casualties. The list of precedents stretches at least as far back as the Roman emperor Diocletian trying to set maximum prices for all commodities in the late third century AD. Over the last century-plus we saw comprehensive price controls and rationing in the two world wars. And even without the context of war, price and even wage controls were implemented during the peak statist years under UK Prime Minister Wilson and even US President Nixon.   2022 has also seen early and haphazard initiatives to manage inflation. Taxes on windfall profits for energy companies are all the rage while governments are failing to use the classic tool of rationing supplies. Instead, they are actively subsidising excess demand by capping heating and electricity prices for consumers. In France, this simply means that utilities go bankrupt and must be nationalised. The bill is passed to the government and then to the currency via inflation. Then we have the likely doomed effort by western officials to cap Russian energy prices from December 5. The intent is to starve Russia of revenue and hopefully cheapen crude oil export prices everywhere, but it will likely do neither.   In a war economy, the government hand will expand mercilessly as long as price pressures threaten stability. The thinking among policymakers is that rising prices somehow suggest market failure and that more intervention is needed to prevent inflation from destabilising the economy and even society. In 2023, expect broadening price and even wage controls, maybe even something like a new National Board for Prices and Incomes being established in the UK and the US.   But the outcome will be the same as it is for nearly every government policy: the law of unintended consequences. Controlling prices without solving the underlying issue will not only generate more inflation but also risking tearing at the social fabric through declining standards of living due to disincentives to produce, and misallocation of resources and investment. Only market-driven prices can deliver improved productivity and efficiency through investment. Looks like we’ll have to learn the lesson all over again in 2023 and beyond.  Market impact: please see Outrageous Prediction on gold rocketing to USD 3,000.      Source: Widespread price controls introduced to cap inflation - Saxo Outrageous Prediction | Saxo Group (home.saxo)
Commodities: Copper price rise on the back of optimistic news from China

China's reopening seems to be a double-edged sword as energy and commodities prices will go up

Ipek Ozkardeskaya Ipek Ozkardeskaya 29.12.2022 10:28
The good news with China's reopening is that it should boost global growth.   The bad news with China's reopening is that it will not only boost global growth, but also energy and commodity prices - hence inflation, the interest rate hikes from central banks and potentially the global Covid cases – which could then give birth to a new, and a dangerous Covid variant, which would, in return, bring the restrictive Covid measures back on the table, and hammer growth.   Note that the reasoning stops here right now, the risky markets are painted in the red, but we could eventually go one step further and say that if the Chinese reopening hits the global health situation – hence the economy badly, the central banks could become softer on their rate hike strategies. But no one is cheery enough to see silver lining anywhere.   This year really needs to end, now!  So, Wednesday was marked by further selloff across European and US markets. The S&P500 slid 1.20% and closed below the 50% Fibonacci retracement on the latest rally. The index gave back half of gains collected from October to November. Trend and momentum indicators, and more importantly market sentiment remain supportive of a deeper dive to meet the major 61.8% Fibonacci retracement, at 3724 mark.   Likewise, Nasdaq lost another 1.32%, and the dips don't look like anyone wants to grab them right now.  In Europe, the DAX struggles to keep its head above the 50-DMA, near 13925.   Across the Channel, despite political shenanigans and Brexit's knock-on effects, high inflation and the cost-of-living crisis, Britain's 100 biggest companies are preparing to close the year with small gains, while the S&P500 has lost more than a fifth of its value.   Why?  First, the British companies had to compensate for the weakening sterling this year –  but that's also true for the DAX, for example, but the DAX is also preparing to end the year around 15% lower. So, it's not only an FX story.   Second, and the most relevant, the fact that the FTSE 100 is heavily crowded in energy and mining stocks is what made the FTSE 100 perform so well this year.   Among the biggest market caps, BP and Shell are up by more than 40% each ytd.  Plus, British big caps make most of their revenues in terms of US dollars; a good thing for a year when sterling lost up to 23% against the greenback at some point and is still down around 10% right now.  And I believe that the FTSE 100's outperformance could stretch into the new year. If the Chinese reopening brings along another bump in inflation due to higher energy and commodity prices, the FTSE 100 could continue offering a good shelter to those willing to hedge against an energy-led global inflation to temper the negative effects.  Of course, the biggest British companies do not reflect the underlying British economy, so the FTSE 100's good performance won't change the fact that smaller, and domestic focused companies will likely continue to suffer from high inflation, recession and perhaps another year of political turmoil as a cherry on top. 

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RebeccaDuthie
Russia Suspends Flow Through The Nord Stream 1 Pipeline, Cotton Futures, Gold Prices Increase For The First Time In 3-weeks
Rebecca Duthie
AlexKuptsikevich
How Have BTC And ETH Performed Recently? Cryptocurrencies: Market Cap Increased Slightly, Telekom And Telefonica "Flirting" With Digital Assets
Alex Kuptsikevich
InstaForexAnalysis
This Week USD May Be Fluctuating! Euro To US Dollar - Technical Analysis And More - 10/10/22
InstaForex Analysis
INGEconomics
US Stocks: S&P 500 And Nasdaq Decreased Slightly Yesterday Losing 0.33% And 0.09% Respectively
ING Economics
AlexKuptsikevich
According to Bloomberg's survey Bitcoin may be trading between $17.6K and $25K
Alex Kuptsikevich
KamilaSzypuła
The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar
Kamila Szypuła
KamilaSzypuła
BMW Was Fined 30,000 Pounds By CMA, Google Wants To Become More Productive
Kamila Szypuła
AlexKuptsikevich
Until FOMC meeting on December 14th, there could be no other catalyst for markets
Alex Kuptsikevich
AleksStrzesniewski
What’s more worrisome is the fact that we will continue to learn of all of the contagion and aftereffects of the FTX collapse in the coming weeks and months.
Aleks Strzesniewski
JingRen
Euro: 50bp rate hike is on the cards, but ECB decides shortly after Fed...
Jing Ren
AleksandrDavidov
Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%
Aleksandr Davidov
AleksandrDavidov
From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level
Aleksandr Davidov
FranklinTempleton
According to Franklin Templeton global stocks' performance may be better than global bonds
Franklin Templeton
INGEconomics
Did you know that in October average gas price was 4.3 times higher than in 2019?
ING Economics
IpekOzkardeskaya
Fed Chair Powell bears in mind inflation prints, but they seem to be insufficient for FOMC
Ipek Ozkardeskaya
IntertraderMarket News
Tesla (TSLA) sank a further 2.58% after Goldman Sachs lowered its price target on the stock
Intertrader Market News
CraigErlam
European Central Bank is expected to go for a less hawkish hike, but economic projections may be worth even more attention
Craig Erlam
AlexKuptsikevich
Switzerland: National Bank goes for a 50bps rate hike. Swiss inflation slowdown is impressing
Alex Kuptsikevich
INGEconomics
Analysts expect ECB to deliver two 50bps hikes in the first quarter with a chance of one more in Q2
ING Economics
INGEconomics
Sterling to euro exchange rate is expected to hit 0.89 in the first quarter of 2023
ING Economics
Crypto.comAccelerate the...
There is a chance Apple may let users install apps from outside the App Store boosting NFT
Crypto.com Accelerate the...
CraigErlam
Craig Erlam talks euro against US dollar amid central banks decisions
Craig Erlam
IntertraderMarket News
Netflix (NFLX) slumped 8.63%, as a media report said the video streaming firm is refunding advertisers after missing views targets
Intertrader Market News
GecoOne
Geco.one COO says Bitcoin reaching $250K in 2023 is considered as impossible by other analysts as BTC does not exceed $60,000
Geco One
EnriqueDíaz-Álvarez
Bank of England decision wasn't unanimous as one member voted for a 75bp hike with two other opting for inaction
Enrique Díaz-Álvarez
INGEconomics
Indonesia is the world's 6th largest bauxite producer. Country bans commodity export from June 2023
ING Economics
InstaForexAnalysis
Gold supported by, among others, changes on Japanese bond market, may end the year trading at a 4-month high
InstaForex Analysis
DanielKostecki
China reopens, Texas freezes - crude oil has to face contrasting factors
Daniel Kostecki
IntertraderMarket News
European stocks closed mixed. The DAX 40 fell 0.50%, the CAC 40 declined 0.61%, while the FTSE 100 rose 0.32%
Intertrader Market News
IpekOzkardeskaya
China's reopening seems to be a double-edged sword as energy and commodities prices will go up
Ipek Ozkardeskaya
INGEconomics
Auto production and general machinery increased significantly. South Korea Industrial Production as a whole gained 0.4%
ING Economics