Trading volumes in financial markets are very low these days. Many ordinary investors are on holiday, and others are focused on the Olympics. So it is easy for the high-frequency computers to create major volatility – and large profits for their owners. Thus they managed to create a 1.5% fall in the S&P 500 on […]
Chemicals and the Economy
If you build it, they may not come
The story of the 1989 US movie Field of Dreams summed up the happy days of the economic supercycle that was then getting underway. Starring A-list players such as Kevin Costner and Burt Lancaster, its theme that “if you build it, they will come” came to define the era. In the world of manufacturing, companies […]
Oil markets break out of their ‘triangle’
There has never been any fundamental basis for the rise in oil prices over the past 3 years: • At no time has there been any actual shortage of product • In fact, inventories have always been at comfortable levels They rose only for two reasons: • The investment banks found they could make a […]
High-frequency trading distorts oil markets
A blog reader has kindly forwarded an important UNCTAD paper (UN Conference on Trade and Development), analysing the growth and impact of high-frequency trading (HFT) on oil and financial markets. It provides important “new evidence regarding the financialisation of commodity markets”. These are now driven by computers which trade in micro-seconds, creating correlation trading which […]
The oil market’s ‘triangle’ pattern continues
The other side of the short-term volatility in oil markets, as discussed yesterday, is that price movements are still trapped in their long-term triangle pattern. As the chart shows, Tuesday’s $3/bbl move was not part of a break-out to new high ground. In fact, Brent’s prices remain within the same $99/bbl – $127/bbl range they […]
High Frequency Trading distorts US markets
The chemical industry, like many others, continues to be badly affected by the volatility of financial markets. Yesterday (Tuesday), for example, saw a 3% jump in US stock prices and crude oil prices. The ‘justification’ for the surge was a minor rise in November’s US housing starts to 685k. As the weather has been seasonally […]
High Frequency Trading dominates as markets crash
The blog was almost alone at the end of April, when it launched the IeC Downturn Alert. Today, its fear that we are close to a global downturn has become mainstream. As the American Chemistry Council report, “fears of another global recession are rising with several noted forecasters raising the chances of another recession to […]
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