HomeResearch and NewsCommodity market Report - November 2019

Commodity market Report - November 2019



Trade war risk has transformed into the source of positive news for the markets as Trump is desperately willing to support stocks in election year especially as he faces an impeachment process. On the other hand ultra dovish expectations from the global CBs are leaving the way to more neutral and balanced approach with the Fed is mostly done with it stimulus and new Chairwoman of ECB is not going to cut rates anymore. Overall risk conditions switched to neutral mode with unexpectedly low volatility in equities but higher one in bonds and commodities. Oil and Gasoline resumed their rally with Nat Gas trying to follow. Precious metals corrected from the recent peak levels but still a little bit overvalued. Agri commodities (ex rising cocoa and coffee) are moderately undervalued. Copper and Aluminum are still undervalued but saw a rotation from overvalued Zinc and Nickel

Macroeconomic drivers neutral to moderately negative as the hopes for Trade Deal and Fed and PBoC stimulus moved higher stock prices and have finally resulted in an incremental improvement in business confidence. EM is still in slowdown mode with Turkey, S.Africa, Argentina and Venezuela are close to crisis.   

Chinese economy is facing a reduced risk of Trade War escalation, but capital flight risks are not abating with unrest in HK and slowing economy. Moreover there are signs of overheating in housing market and stress in overleveraged corporate and banking sector

Investors’ interest in commodities was good over the last months. There is no excess in overall commodity universe with net long elevated in Gold and Gasoline and net short in Aluminum, Copper, Nat Gas and Corn. Open interest in commodity trading is rising despite the drop in volume traded – sign of longer term investment

Weather conditions are in moderate chance of El Nino that is negative for prices of most grains and natural gas, but a little bit positive for cocoa and coffee. Political risks turned neutral for most commodities except Gold as Trade War and recession risks abating and tensions in the Middle East are less acute


  • Add Short in Palladium at 1800 $/oz (target 1200 $/oz). Hold Long in Platinum and add at 800-850 $/oz

  • Play the range in Brent: long at 50-55 and short at 65-70 $/bbl.

  • Buy Gold at 1400 $/oz with mid-term target of 1600 $/oz; hedge with Short in Silver at 17.5-18.0 $/oz

  • Play the range in Cocoa: long at 2200-2250 and short at 2650-2700 $/mt.

  • Add to long in Coffee at 100-105 cents/lb for March futures with target above 125 cents/lb

  • At 250 c$/lb Copper could be a good contrarian buy with expectation for the Trade War Truce

  • Long June Nat Gas futures at 2.0-2.1 $/MMBtu for better fundamentals and target 3.0-3.5 $/MMBtu


Read more

Oil Market Report - September 2022

As the crude oil market is experiencing its largest 90-day decline since March-April 2020, which was only exceeded prior to 2020 by market routs in 2014-15 and 2008-09, we see the limited downside in crude oil prices from the levels achieved and believe that the market would pass its trough before the winter starts as the fundamentals remains rather tight and only would get tighter in a couple of quarters ahead. On the demand side, both the OPEC and the IEA expected a rather robust growth of the global oil consumption in 2023, driven mainly by jet fuel and robust oil use for power generation in the Middle East and in Europe due to record natural gas and electricity prices. In addition, petroleum product markets, especially diesel, are expected to remain in deficit in coming quarters due to downstream capacity constraints outside of China as lower Chinese export quotas have sharply reduced its sales abroad and newly introduced taxes in India have discouraged exports from Asia’s largest supplier. 

oil, investment

Banking Sector Monthly Report - August 2022

US banks outperformed the broad market slightly in August 2022, for the first time over the last three months. However, BKX index ended the month in the red, for the 5th time out of the first 8 months of 2022. BKX index decreased by 2.4% MoM in August 2022 vs -4.2% MoM of SPX index. Absolute August performance was -0.5 std from the mean monthly performance, and it was in the bottom 28% of absolute monthly performance in the index history. 

investment, banks;

Oil Market Report - July 2022

Crude oil prices surged further in June 2022 for the second consecutive month, with ICE Brent and NYMEX WTI first-month contracts averaging nearly 5% higher on a monthly average basis despite a relatively volatile month and tumbling financial markets. The market was driven by a strong supply/demand outlook in the short term and geopolitical developments in major producing regions. The ICE Brent front-month contract increased by $5.54 in June 2022, or +4.9%, to average $117.50 / bbl, and NYMEX WTI front-month contract rose by $5.08, or +4.6%, to average $114.34 / b. 

oil, investment