Daily Brief Macro: The Drill: China to the commodity rescue? and more

• Welcome to our weekly editorial on everything Geopolitics and Commodities.
• Industrial metals (and precious metals) have performed very well this year, and we’ve thankfully been part of (parts of) this ride.
• With new signs emerging of a stimulus targeting consumption patterns in the economy, Wall Street’s takeaway has been that China has regained significant momentum.

• Bank Of China Ltd, Celltrion Inc and Li Auto top the list as the largest index constituents held by less that 5% of active Asia Ex-Japan funds.
• Unloved stock numbers increase after China A-share inclusion in 2018/19 and further amplified by post-2020 restrictions on select Chinese military-linked firms.
• Select funds do own sizeable positions in these stocks.  Are they the ultimate contrarian trades?

• Eurostat shrunk the final Euro area inflation print for February by 5bp, rounding it down to 2.3% after German revisions, reversing the upward surprise from the flash release.
• French energy utility prices drove this decline, and petrol prices seem set to drag it down further in March. However, the median impulse is also relatively subdued.
• ECB policy is unlikely to be affected by this revision and the temporary impact of energy prices on inflation. We still expect it to hold rates in April before a final cut in June.

• Trelleborg plant in the US to shut down in April, 2025
•  Israel, Prague plants too stop working in 2025
• Hangzhou to have car tire plant producing 9 million tires a year

• WTI futures rose 0.2% for the week ending 14/Mar, reversing a seven-week losing streak, driven by Middle East tensions and tighter-than-expected U.S. crude inventories.
• U.S. rig count remained unchanged at 592, after falling by one last week. The oil rig count grew by one to 487 and gas rigs fell by one to 100.
• WTI OI PCR rose to 0.93 on 14/Mar from 0.91 on 07/Mar. Call OI increased by 5.6% WoW, while put OI rose by 7.6%.

• For the week ending 14/Mar, U.S. natural gas prices fell by 6.7% due to milder weather forecasts and increased U.S. production.
• Henry Hub hit a two-year high early in the week but quickly retreated due to warmer-than-expected winter forecasts. Prices ended the week below the 9-day and 21-day moving averages.
• Henry Hub OI PCR increased to 1.03 on 14/Mar compared to 1.00 on 07/Mar. Call OI rose by 3.1% WoW, while put OI grew by 7%.

• Discussion of podcast topics on St. Patrick’s Day and credit crisis history
• Analysis of current market trends and performance, including digital assets and tariffs
• Comparison of market patterns from previous years to predict future performance and impact of events like tariffs

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• Fiscal / Analysis: China tables fiscal salvo for flagging domestic demand
• Loans /: Chinese banks relax loan terms to fuel tech sector M&A deals
• Tesla FSD: Tesla Inc. is offering its Chinese customers a one-month free trial of its Full-Self Driving (FSD) feature, which still requires drivers to keep their hands on the wheel…

• Russia is at a turning point. This together with its size, mineral riches, cheap valuations and common sense suggest investors should be looking to enter the market.
• The end of the Ukraine and the re-integration of Russia into world trade and financial markets will be a turning point for the country. 
• At home the war time economic boom is winding down. High interest rates and inflation are dampening demand and growth will slow this year. Even so Russia’s outlook is brightening.

• The Bank of Japan held its uncollateralised overnight call rate at around 0.5%, in line with expectations, reflecting a moderate economic recovery and sustained inflationary pressures.
• Core CPI inflation remains at 3.0-3.5% year-on-year, with underlying inflation expected to gradually rise towards the BoJ’s target by 2025, driven by a tightening labour market and wage-price dynamics.
• The BoJ remains data-dependent, with policy direction contingent on wage growth sustainability, yen depreciation effects, and global economic risks, suggesting a cautious approach to normalisation.