Trusted market intelligence for the global chemical, energy and fertilizer industries
A new report from Pimco, the world’s largest bond fund manager, makes it clear they share the blog’s worries about the increasingly negative impact of western central bank policy: “Central banks have reached a critical inflection point in which the negatives of their aggressive policies may be outweighing the positives and in fact hampering growth. [...]
As the Financial Times wrote on Saturday: “Earlier this year, it all seemed so straightforward. Central banks printed money and proffered soothing words, and markets went up. Now, it’s getting more complicated.” In fact, nervous readers might want to stay away from financial markets for a while. Just 2 weeks ago, crude oil prices suddenly [...]
We are now nearly at the end of May, and still there is no sign of a sustained recovery in demand. This mirrors the weakness seen in January and March – normally also very strong months. Now, unless seasonal patterns are overturned, demand will remain slow until September – when people return from holidays and [...]
‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’ This quotation from Lewis Carroll’s great novel ‘Through the Looking-Glass‘ rather seems to sum up policymakers’ current approach to financial markets. Two recent examples highlight the issue: • [...]
Friday provided a good test of the blog’s analysis that Japan’s aggressive policy of devaluing the yen could result in major downward pressure on crude oil prices: • The yen crashed through the $1: ¥100 level, ending at a 4-year low of $1: ¥101.6 • Brent sold off by $2.80/bbl, only recovering after Asian markets [...]
Central bankers mean well. But, of course, good intentions do not guarantee good results. Their intention since the start of the 2008 crisis has been to boost financial markets. They have therefore provided $tns of liquidity, which has indeed produced record highs in major stock market indices such as the S&P 500 and Dow Jones [...]
Don’t be surprised if your finance team starts working even longer hours over the next few weeks. Not only will they have to worry about revising profit forecasts and working capital issues, as demand weakens in some core markets. Now they have to worry about what might happen to the cash actually in some company [...]
China’s new premier, Li Keqiang, was the first senior official to confirm that the country’s GDP figures were “for guidance only”, being “man-made and therefore unreliable“. As he told the US ambassador in 2007, he instead used electricity consumption and bank lending (plus rail cargo) as his key indicators. It therefore seems appropriate to mark [...]
The blog’s 6 monthly review of global stock markets highlights a very unusual pattern since global demand and chemical markets peaked on 29 April 2011, as the chart shows: • Markets in developed economies have powered ahead with Japan up 24%, the US S&P 500 up 14%, the UK up 8% and Germany up 6% [...]
The president of the European Central Bank, Mario Draghi, was ‘person of the year’ in financial markets with his July promise to “do whatever it takes” to save the euro. 6 months later, it seems worth checking on the current situation. The chart thus updates the position on interest rates (green column) in the weaker [...]
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