In today’s briefing:
- UK Inflation Excess Survives Reweighting
- Steno Signals #189 – The Perception Vs. Reality of Inflation: A Growing Divide
- The Center Cannot Hold
- Beijing’s Ramped-Up Policy Support May Not Deliver Sufficiently
- Asia base oils supply outlook: Week of 17 March
- Americas/EMEA base oils demand outlook: Week of 17 March
- Global base oils arb outlook: Week of 17 March
- Global base oils margins outlook: Week of 17 March
- CX Daily: The Great Wealth Migration: Why the Ultra-Rich Are Fleeing Britain
- Asia base oils demand outlook: Week of 17 March
UK Inflation Excess Survives Reweighting
- Updated inflation basket weightings can shift the inflation outlook without any new fundamental shock. The seasonal and trend outlook is unaffected by the 2025 update.
- Although our forecast is broadly unchanged, this still mitigates the risk that reduced weights on energy and sanitation utilities dampen the surge in April and July forecasts.
- This outcome further emboldens our confidence in our above-consensus forecast. We also note that the average import intensity is now weighted near historic lows.
Steno Signals #189 – The Perception Vs. Reality of Inflation: A Growing Divide
- Happy Monday from Copenhagen! We have a six-month stopgap funding deal in place in the U.S. until September, but no new debt ceiling legislation.
- So, despite a shutdown being avoided, we are not yet talking about a new mountain of debt.
- This is why I think the late-Friday reaction in bond yields was somewhat overdone.
The Center Cannot Hold
- The fracturing of political alliances is a growing risk factor for markets and therefore models.
- Central Banks (Monetary Policy) have been the main source of risk / relief since the 2008 GFC
- Since BrExit (2016), political instability has been a growing factor, rewriting trade, fiscal policy and more.
Beijing’s Ramped-Up Policy Support May Not Deliver Sufficiently
- The latest policy signals show that Beijing is more serious about boosting consumer demand. But these still fall short of the much-needed rebalancing of the economy from investment towards consumption.
- Promised support should maintain growth this year but Beijing’s reluctance to go further probably stems from the need to keep its fiscal powder dry, given the uncertainty emanating from Washington.
- Better-Than-Expected economic data would have validated its cautious approach. Yet, given continued patches of persistent weaknesses, the costs of inaction will grow
Asia base oils supply outlook: Week of 17 March
- Asia’s base oils prices extend rise versus feedstock/competing fuel prices.
- Increasingly firm margins coincide with closed arbitrage to more distant outlets like Americas, and less feasible arbitrage to logistically-closer markets like India and Middle East.
- Firm margins and closed arbitrage point to tight supply.
Americas/EMEA base oils demand outlook: Week of 17 March
- Seasonal boost in US base oils demand could be more muted than expected, with uncertainty about end-user consumption incentivizing buyers to maintain lower stocks.
- Seasonal rise in demand typically cuts surplus supplies and often coincides with plant maintenance work, like this year.
- Stronger demand and tighter supply typically give refiners more leverage to adjust prices to reflect those firmer fundamentals.
Global base oils arb outlook: Week of 17 March
- US Group II base oils export prices mostly stay in narrow range vs vacuum gasoil so far this year.
- US’ steady price premium contrasts with strong rise in Asia Group II base oils export price premium to Singapore gasoil prices so far this year.
- US Group I brightstock price rises vs vacuum gasoil so far this year.
Global base oils margins outlook: Week of 17 March
- Global base oils values rise vs feedstock/competing fuel prices.
- Firmer base oils values contrast with lower gasoil premium to crude oil, magnifying impact of rising base oils premium.
- Rising base oils premium points to firm supply-demand fundamentals, especially in Europe and Asia.
CX Daily: The Great Wealth Migration: Why the Ultra-Rich Are Fleeing Britain
- Wealth / The Great Wealth Migration: Why the ultra-rich are fleeing Britain
- Payment /: UnionPay partners with Cambodia, Thailand to make payments easier
- Ports /Commentary: Why Li Ka-shing’s Panama ports sale is a good deal
Asia base oils demand outlook: Week of 17 March
- Asia’s base oils demand could ease, with buyers having already covered requirements for peak-demand season in month of March.
- Typical slowdown in consumption at start of second quarter of year curbs urgency for blenders to replenish supplies.
- Expectations of improving availability in Q2 2025 add to attraction of holding off moves to replenish stocks.
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