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

<ul><li>"El Nino has peaked and is declining, indicating a return to neutral in the southern hemisphere autumn 2024 (March-June)," the Australian Bureau of Meteorology wrote last week.</li><li>Even more the institute forecasts that El Nino may completely dissipate by June.</li><li>For our clients, that won’t come as a surprise as we highlighted this scenario over a couple of weeks.</li></ul>

"El Nino has peaked and is declining, indicating a return to neutral in the southern hemisphere autumn 2024 (March-June)," the Australian Bureau of Meteorology wrote last week.Even more the institute forecasts that El Nino may completely dissipate by June.For our clients, that won’t come as a surprise as we highlighted this scenario over a couple of weeks.

Goodbye El Nino - Hello again La Nina // The case for Bitcoin

<ul><li>In a soft-landing economic environment, history suggests that commodity indexes stay stable around the first rate cut then trend higher six months after.</li><li>Historically, industrial metals tend to lag energy by several months.</li><li>By contrast, prices of precious metals, especially gold, generally rise six months after the first rate cut then hit a temporary plateau —something we saw even during the extremes of the 2008 financial crisis and the recent pandemic. </li></ul>

In a soft-landing economic environment, history suggests that commodity indexes stay stable around the first rate cut then trend higher six months after.Historically, industrial metals tend to lag energy by several months.By contrast, prices of precious metals, especially gold, generally rise six months after the first rate cut then hit a temporary plateau —something we saw even during the extremes of the 2008 financial crisis and the recent pandemic. 

How Commodities Perform Around First Rate Cut

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

Junior Finance Analyst, Steno Research

Ulrik Simmelholt

Junior Finance Analyst

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>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

Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

<ul><li>We have been trying to trade the EURUSD on the short side a few times over the past 1-2 months with mixed results.</li><li>Our fundamental story has been proven right but we have struggled to make money trading the relative weakness in Europe compared to the US in FX space.</li><li>The bet has paid off in various other proxies such as the US equity superiority but not in FX.</li></ul>

We have been trying to trade the EURUSD on the short side a few times over the past 1-2 months with mixed results.Our fundamental story has been proven right but we have struggled to make money trading the relative weakness in Europe compared to the US in FX space.The bet has paid off in various other proxies such as the US equity superiority but not in FX.

FX Watch: Everything that Matters for EUR/USD Is Natural Gas

United States

Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, but commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide, or helium. It is formed when layers of decomposing plant and animal matter are exposed to intense heat and pressure supplied by existing under the surface of the Earth over millions of years. The energy that the plants originally obtained from the sun is stored in the form of chemical bonds in the gas.

Natural Gas (NATURAL GAS COMDTY)

Goodbye El Nino - Hello again La Nina // The case for Bitcoin

"El Nino has peaked and is declining, indicating a return to neutral in the southern hemisphere autumn 2024 (March-June)," the Australian Bureau of...

The Commodity Report

How Commodities Perform Around First Rate Cut

In a soft-landing economic environment, history suggests that commodity indexes stay stable around the first rate cut then trend higher six months...

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

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

FX Watch: Everything that Matters for EUR/USD Is Natural Gas

We have been trying to trade the EURUSD on the short side a few times over the past 1-2 months with mixed results. Our fundamental story has been...

Steno Research