Commodities

US Weekly Petroleum Status Report

The large fall in US commercial crude stocks was mostly due to a renewed rise in exports. Implied gasoline demand rose for a second consecutive week, but this failed to lift prices amid growing concerns over demand prospects. That said, we expect that risks to supply could still support prices later in the year.

17 August 2022

Equity and commodity prices may go their own ways

We think equity and commodity prices will generally head in opposite directions over this year and next.

16 August 2022

Pressure from rising Treasury yields likely to resume

This week the prices of most commodities got a boost as investors pared back expectations for rate hikes in the US, following lower than expected inflation data. That said, we still expect a further small rise in the US 10-year Treasury yield by the end of the year, which could put renewed downward pressure on the prices of commodities, and particularly gold, in the coming months. Supply disruption caused by the war in Ukraine seems to be easing, as grain ships have continued to leave Ukrainian ports. Meanwhile, there were renewed efforts to revive the 2015 Iran nuclear deal. While there are still hurdles, if a deal were agreed, we would expect a rapid rise in Iranian oil output, which would weigh on oil prices. Next week, we’ll be paying close attention to the latest activity and spending data from China on Monday. We expect that the data will show that the post-lockdown recovery lost steam in July, alongside a renewed deterioration in the property sector, which could weigh on industrial metals prices next week.

12 August 2022

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Long Run Returns Monitor (Q3)

Our Long Run Returns Monitor provides our updated long-term projected returns for major asset classes, as well as a summary of the macroeconomic forecasts which underpin them. All projections in this publication are as of 10^th August 2022. See a more detailed explanation of our views in our Long Run Economic Outlook and Long Run Asset Allocation Outlook.

12 August 2022

Global

Bonds

Commercial

Commodities

Energy crisis hotting up

The biggest problem in Europe’s energy markets is the reduction in Russia’s gas exports. But extreme weather conditions are compounding the problem by making life difficult for nuclear, hydro and coal-fired power plants. Next week, we expect to learn that employment increased slightly in the second quarter. Drop-In: Europe under siege – The economic impact of Russia’s gas threat Thursday, 18^th August 10:00 ET/15:00 BST. Register now.

12 August 2022

RBA to slow pace of tightening from October

The latest survey data suggest that inflation will continue to accelerate over coming months and we expect the Reserve Bank of Australia to deliver another 50bp rate hike next month. But with food spot prices returning to the level before the Ukraine war and wholesale gas and electricity prices coming off the boil, the Bank will probably slow the pace of tightening to smaller 25bp hikes from October.

12 August 2022

Australia & New Zealand

OPEC Monthly Oil Market Report (Aug.)

OPEC’s monthly report for August showed that the group continues to produce significantly less than its quota and we expect this trend to continue in the coming months. OPEC is clearly worried about demand due to the economic slowdown, and that’s despite news of some gas-to-oil switching in power generation.

11 August 2022

Global

Commodities

Energy

Egypt: PIF steps up investment; CBE rate hike on the cards

Saudi Arabia’s Public Investment Fund has stepped up investments into Egypt this week that will help to ease external financing concerns. At the same time, electricity rationing will begin next week to free up more natural gas (which Egypt relies on for power) for export in an effort to narrow the large current account deficit. However, these measures will only provide a short-term reprieve and a weaker pound and steps to attract more direct investment will be key to putting the external position on a more sustainable footing. Meanwhile, rising inflation is likely to prompt the Central Bank of Egypt to resume its tightening cycle with a 50bp hike, to 11.75%, next Thursday.

11 August 2022

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