Data-Driven Commodity Research, The Commodity Report

The Commodity Report

Data-Driven Commodity Research

A unique newsletter about commodities and macro analysis in a weekly format.

Commodities

Crude Palm Oil Active Contract / Commodities

<ul><li>Hedge Funds Pushing into Commodities Markets Big trading houses like Glencore, Trafigura, Mercuria or Vitol are benefiting since years now from the increasing fluctuations on the commodities markets.</li><li>This trend increased, especially since crude oil went negative when the Covid pandemic started and was followed by further volatility since the macro environment became even more fragile with the war in Ukraine and now the conflicts in the Middle East.</li><li>According to Ney York based consulting firm Oliver Wyman, the gross margin of trading houses amounted to 105 billion dollars in 2023.</li></ul>

Hedge Funds Pushing into Commodities Markets Big trading houses like Glencore, Trafigura, Mercuria or Vitol are benefiting since years now from the increasing fluctuations on the commodities markets.This trend increased, especially since crude oil went negative when the Covid pandemic started and was followed by further volatility since the macro environment became even more fragile with the war in Ukraine and now the conflicts in the Middle East.According to Ney York based consulting firm Oliver Wyman, the gross margin of trading houses amounted to 105 billion dollars in 2023.

Hedge Funds Pushing into Commodities Markets

Product Marketing Manager, Criat

Raghav Chandra Mathur

Product Marketing Manager

Next-Generation Credit Analytics Provider

Criat

Criat specializes in new-generation data-driven credit analytics. Leveraging our industry-leading DeepCredit analytical technologies, we produce daily-updated forward-looking credit assessment and valuation to help financial institutions stay ahead of risks. Coupled with use-case-driven applications, we extract insights, answer questions and enable smarter credit decisions.

Thematic (Sector/Industry)

<ul>
<li>Oil spot prices have gained at a relatively stable pace since the start of 2024, with crude prices rising close to 19% year to date.</li>
<li>Robust demand due to recovery in economic activity across major markets has been a steady tailwind to oil prices despite the prevalent geo-political catalysts that have spurred across global markets.</li>
<li>Globally listed oil and gas producers and service providers have therefore seen a marginal improvement in their aggregate credit risk profiles, with their Criat Credit Cycle Index (CCCI) dropping by close to 2bps over the same period.</li>
</ul>


Oil spot prices have gained at a relatively stable pace since the start of 2024, with crude prices rising close to 19% year to date.
Robust demand due to recovery in economic activity across major markets has been a steady tailwind to oil prices despite the prevalent geo-political catalysts that have spurred across global markets.
Globally listed oil and gas producers and service providers have therefore seen a marginal improvement in their aggregate credit risk profiles, with their Criat Credit Cycle Index (CCCI) dropping by close to 2bps over the same period.


Global O&G Firms' Credit Quality Improves on Tighter Oil Markets

Head of Research, Steno Research

Emil Moller

Head of Research

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Macroeconomics

<ul>
<li>Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from the BLS swiftly dispelled any lingering dovish sentiment that had survived the recent NFP announcement.</li>
<li>We’ve analyzed both the CPI data (see here) and the current labor market in detail (see here), and although there are signs of cooling, it’s difficult to counter the recent adjustments in the OIS curve.</li>
<li>This suggests that USD assets remain the focal point, and for the foreseeable future, EM macro strategies should lean towards spread/receiving rather than expecting an NVDA-like bull run in equities</li>
</ul>


Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from the BLS swiftly dispelled any lingering dovish sentiment that had survived the recent NFP announcement.
We’ve analyzed both the CPI data (see here) and the current labor market in detail (see here), and although there are signs of cooling, it’s difficult to counter the recent adjustments in the OIS curve.
This suggests that USD assets remain the focal point, and for the foreseeable future, EM macro strategies should lean towards spread/receiving rather than expecting an NVDA-like bull run in equities


Junior Finance Analyst, Steno Research

Ulrik Simmelholt

Junior Finance Analyst

<ul><li>Takeaways upfront: No container shipping through Suez towards Europe and price increases ahead; Energy and dry bulk shipping is still alive; Expect transportation and apparel to see price increases in Europe; Hedging 2024 portfolios with long Shipping bets and/or long Energy bets make increasing sense.</li><li>Happy New Year everyone! Things are escalating in the Red Sea as shipping giants such as Maersk and Hapaq-Lloyd haven’t been convinced by the military efforts in the Red Sea and have now completely avoided transporting goods from Asia to Europe through the Red Sea.</li><li>That can be seen in prices which have seen one-way traffic the last week. Freight rates are up &gt;100% this week, and we hear from sources that Maersk is now suggesting an all-in rate of USD 6000 TEU.</li></ul>

Takeaways upfront: No container shipping through Suez towards Europe and price increases ahead; Energy and dry bulk shipping is still alive; Expect transportation and apparel to see price increases in Europe; Hedging 2024 portfolios with long Shipping bets and/or long Energy bets make increasing sense.Happy New Year everyone! Things are escalating in the Red Sea as shipping giants such as Maersk and Hapaq-Lloyd haven’t been convinced by the military efforts in the Red Sea and have now completely avoided transporting goods from Asia to Europe through the Red Sea.That can be seen in prices which have seen one-way traffic the last week. Freight rates are up &gt;100% this week, and we hear from sources that Maersk is now suggesting an all-in rate of USD 6000 TEU.

Suez Watch: Massively Rising Container Freight Rates, While Dry Bulk, LNG and Crude Rates More Muted

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Cross Asset Strategy

<ul>
<li>Even though the number of observations is limited, we believe looking at the broader picture surrounding previous Bitcoin halvings provides valuable insights.</li>
<li>For example, all previous halvings occurred during equity bull markets, modest GDP growth, mild inflation, and easy or easier Federal Reserve monetary policy. Similar circumstances are on the horizon.</li>
<li>Declining Bitcoin supply, because of the halving and the rise of long-term investors, combined with the approval of US spot Bitcoin ETFs will likely become this halving's catalyst.</li>
</ul>


Even though the number of observations is limited, we believe looking at the broader picture surrounding previous Bitcoin halvings provides valuable insights.
For example, all previous halvings occurred during equity bull markets, modest GDP growth, mild inflation, and easy or easier Federal Reserve monetary policy. Similar circumstances are on the horizon.
Declining Bitcoin supply, because of the halving and the rise of long-term investors, combined with the approval of US spot Bitcoin ETFs will likely become this halving's catalyst.


Taking the Bitcoin Halvings Out of Isolation

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

Hedge Funds Pushing into Commodities Markets

Hedge Funds Pushing into Commodities Markets Big trading houses like Glencore, Trafigura, Mercuria or Vitol are benefiting since years now from the...

The Commodity Report

Global O&G Firms' Credit Quality Improves on Tighter Oil Markets

Oil spot prices have gained at a relatively stable pace since the start of 2024, with crude prices rising close to 19% year to date. Robust demand...

Criat

EM by EM #43: Rand’s Reckoning?

Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from...

Steno Research

Suez Watch: Massively Rising Container Freight Rates, While Dry Bulk, LNG and Crude Rates More Muted

Takeaways upfront No container shipping through Suez towards Europe and price increases ahead; Energy and dry bulk shipping is still alive...

Steno Research

Taking the Bitcoin Halvings Out of Isolation

Taking an in-depth look at previous Bitcoin halvings by taking them out of isolation by adding economic and market circumstances: Why Spot Bitcoin...

Jeroen Blokland

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