In today’s briefing:
- Rising on Geopolitical Tides, Gold Braces for Pressure in 2024
- Mint Macro Roundup: US Dec CPI up 3.4% Beating Expectations yet Rate Cut Optimism Remains Intact
- When Will the Red Sea Crisis Be Over?
- Out of the Box #26: OPEC is dead in it current form
- UK: More Employees Not Settling for Less
Rising on Geopolitical Tides, Gold Braces for Pressure in 2024
- Geopolitical risk has driven a resurgence in gold with price 1.5% higher following heightened tensions in the middle-east.
- In a soft-landing scenario in 2024, gold faces downside risk from investor rotation to other assets.
- Options metrics point to bullish positioning in gold, central bank demand remains a strong driver in H2 2023.
Mint Macro Roundup: US Dec CPI up 3.4% Beating Expectations yet Rate Cut Optimism Remains Intact
- US inflation rate ticked up to 3.4% in December and came in above analyst expectations. Core inflation remains equally stubborn.
- Similar inflationary pressures as November were observed with shelter costs and service index rising and energy prices continuing to fall. Notably, energy prices slowed their pace of monthly decline.
- Market impact of the CPI report was muted as initial price action upon release of the report was reversed through the day.
When Will the Red Sea Crisis Be Over?
- Welcome to this week’s Great Game! In the midst of Taiwanese elections and US primaries, the focus of investors world-wide is still on the Red Sea Crisis and the expected spill-over into inflation and markets.
- In this piece we will attempt to answer the most obvious question – when will the crisis end and when will international shipping return to the shortest and most economical route through the Red Sea?
- First of all, let’s remember why the attacks are ongoing.
Out of the Box #26: OPEC is dead in it current form
- Key take aways: OPEC losing its impact on the market due to non-OPEC members productionFor how long can Saudi Arabia pull all the weight?
- Europe and China would be the biggest winner in a OPEC breakdownHi and welcome to this year’s first ‘Out of the Box’.
- Readers of our energy coverage will know that we have been very skeptical of the developments around OPEC and the crude oil markets.
UK: More Employees Not Settling for Less
- UK unemployment unsurprisingly remained at 4.2% again in November amid ongoing employment growth. However, job vacancies have fallen by more than seasonal norms.
- A potential loss of demand has not prevented wage settlements so far in January from matching last year’s excesses, albeit with a tighter range around the median.
- Stability in wage settlements and unemployment continues to suggest that inflation expectations are too high and policy isn’t too tight, so there is no need to cut rates.
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