Oil and Metals
OPEC and allies reach a compromise
The oil industry has remained pressurized by a supply glut and the ongoing uncertainty on the demand outlook with respect to the structural changes in the energy market and the pandemic. The recent vaccine updates and hopes that the pandemic may soon be under control, is providing support to a fundamentally battered energy market. As the year com...
Crude Oil Market
An oil price war and the pandemic struck the crude oil market at a time where the industry was already faced with a simultaneous demand and supply shock. Put simply, crude oil prices were already under pressure due to a flood of supply at a moment of diminishing demand. A Supply Glut which is mainly driven by US shale producers and a Weak Oil D...
The US Dollar and Gold
Investors generally piled-up in the Gold and the US dollar as those assets are viewed as safe-haven during times of crisis or uncertainties- be it economical, political or policy uncertainties. 2020 has been a year of extreme uncertainty and volatility which saw the world battling an unprecedented and paralleled health and economic crisis in mod...
The Reopening Experiment and Geopolitical Risks
The Grand Reopening Given the unprecedented nature of the Great Lockdown, the gradual reopening of economies are now being viewed as an experiment. World leaders are faced with tough decisions trying to manage unparalleled health and economic crisis and the differences of opinions over how, when and which businesses should resume. The uncertaint...
The Lockdown, the Fallout and the Roadmap to Recovery
Global Lockdown In an abrupt and unprecedented manner, the world witnessed a mass halt to global activities due to the pandemic. Governments and central banks rushed in to intervene and support the global economy with unconventional measures to cushion the impact of the coronavirus on their economies and ease market strains. As the virus spread...
A Summary of Major US Earnings Reports
A Summary of Major US Earnings Reports IBM, Netflix Inc, Snap AT&T, and Intel Corp were among the major large-cap corporations reporting earnings.Even though the pandemic is expected to portrait a dire outlook, earnings results are much awaited to gauge if large companies can muddle through the crisis and how they are preparing for an eventua...
OPEC and G20 Meetings Not Guaranteed
On 8 March 2020, Saudi Arabia initiated an oil price war with Russia, triggering a rout in the oil market at a time where the world is facing a pandemic and many countries forced to shut down their activities and borders. Crude oil prices have lost nearly half of their prices, battled by a simultaneous demand and supply shock. Last Thursday, Pr...
First Quarter: Crisis, Volatility, and Opportunities
The first quarter of 2020 was marred by unpredicted events that rattled the financial markets: Tensions between US and Iran; The extreme weather conditions across the globe as a result of climate change; The novel coronavirus; and An oil price war between Saudi Arabia, the oil kingdom, and Russia. A Trio of Crises Faced by an unpreced...
The Perfect Storm Brewing in the Oil Market
The Perfect Storm Brewing in the Oil Market The oil and gas industry has been undergoing significant challenges due to the structural shift within the industry. A pandemic-induced economic downturn and an oil price war have now added another layer of uncertainty to the oil markets. Tensions between Saudi Arabia and Russia have disrupted the stab...
Gold Is Being Liquidated
Liquidity Crisis High levels of liquidity happen when there is both supply and demand for an asset, meaning transactions can take place easily. A market is considered to be liquid if it can absorb liquidity trades with significant changes in price. A liquidity crisis is, therefore, an acute shortage or drying up of liquidity. In simple terms, it...
US Dollar and Gold in Tandem
Which safe-haven to choose in 2020 – Gold or the Mighty Dollar? In times of uncertainties – be it economical, political or policy-related, investors generally seek safety with haven assets like the US dollar, Japanese Yen, Swiss franc or Gold. Our attention today is on Gold and the US dollar, both of which have had an interesting start to...
2020 Kicks off with US-Iran and Climate Change Crisis
The start of the year was marred by the escalating tensions between the US and Iran while extreme weather conditions across the global triggered fierce debates about climate change. What do we know so far about the tensions between Iran and the US? Iranian-backed militia killed an American Defense Contractor The US retaliated with missile...
2019 in a Nutshell and the Transition to a New Decade
If we could describe the year 2019 in one word, we believe uncertainty says it all. The world entered 2019 with a high level of ambiguity and is poised to finish the year with the same extent of uncertainties. The Global Economic Policy Uncertainty Index which is a GDP-weighted average of national EPU indices for 20 countries has remained in ele...
OPEC Meeting: A Crucial Week for the Oil Market
Thursday’s OPEC meeting will be a decisive one for the oil market. OPEC members and its allies (OPEC+) will gather on the 5th and 6th of December for the 177th meeting of the OPEC conference. This producer’s summit is likely to be heavily influenced by the upcoming Saudi Aramco’s IPO. OPEC+ Politics The rising tensions in the Middle East...
RBA: “QE is not on our Agenda!”
This year’s Annual Dinner of the Australian Business Economists was probably the most important event before the year ends. In a year that saw the RBA cutting interest rates three times, the speech around “Unconventional Monetary Policy: Some Lessons From Overseas” fueled speculations that the RBA is to tap into the unchartered territory...