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Insights and Analysis
Выбор редакции
23 мая, 14:20

High U.S. Debt Could Put Fed on Cautious Footing

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The U.S. economy is humming along at 2% GDP growth but the high level of public and private debt could temper the pace of the Fed's rate hikes.

18 мая, 22:00

Oil: OPEC Output Cuts vs. Rising U.S. Rig Count

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Saudi Arabia, the top exporter among oil producers grouped under the Organization of Petroleum Exporting Countries (OPEC), and Russia announced on May 15 that they favored extending production cuts for an additional nine months into 2018, rallying oil prices.  The celebrations, however, might be short-lived.  As we have pointed out on several occasions, fracking technology has made the United States a major swing producer in energy markets, diminishing the influence of Saudi Arabia and other OPEC members.  OPEC members will meet on May 25 in Vienna to decide on renewing production cuts.  From just the end of October 2016, U.S. producers have added nearly 900,000 barrels per day (bpd) to their production, largely offsetting OPEC’s current production cuts.  The rise in U.S. production has contributed to an extraordinarily flat futures curve for West Texas Intermediate crude oil, hugging $50 per barrel far into the landscape (Figure 1).   And, the ability of U.S. producers to offset changes in production from OPEC countries may be contributing to a decline in both realized and implied volatility in crude oil (Figure 2). View our video on this topic here.  

Выбор редакции
09 мая, 18:56

Canada: Is Debt, Real Estate Sinking the Loonie?

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For most of the past six years, the Canadian dollar (CAD) closely tracked movements in West Texas Intermediate (WTI) crude oil.  But from mid-2016, CAD began diverging, underperforming WTI significantly (Figure 1).  And the parting of ways was not the result of a generally stronger U.S. dollar (USD).  The Russian ruble, which also correlates highly with oil prices, has outperformed WTI over the same period (Figure 2).  Both Canada and Russia are major producers of crude oil.  CAD’s divergence from oil may have to do with deeper economic problems: the country’s extremely high levels of debt and overvalued real estate prices.

Выбор редакции
05 мая, 18:06

Oil: Battle of the Swing Producers Heats Up

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As OPEC members meet in Vienna on May 25 to discuss extending their production cuts for another six months, U.S. shale producers have been ramping up supplies.

Выбор редакции
02 мая, 19:16

Britain, France: A Tale of Two Discordant Elections

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Unlike the first round of the French presidential elections on April 23, which saw an exciting four-horse race, the upcoming parliamentary elections in the United Kingdom appear to be a one-sided affair. 

Выбор редакции
02 мая, 14:00

French Election: Outcome Could Impact Euro, EU

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

Выбор редакции
27 апреля, 14:00

Gold Options: Breaking Out of the Doldrums

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In the one-and-a-half months after the U.S. elections on November 8, gold prices plunged 12% on the assumption that the incoming president’s fiscal stimulus would boost the economy and lead to higher interest rates.  However, with the Trump agenda running into numerous roadblocks since then, the yellow metal has rebounded, recouping nearly all its post-election losses.  Gold options, meanwhile, have perked up from their recent lows, but with implied volatility at less than 14% they remain historically inexpensive (Figure 1).  A podcast on this topic can be found here.

Выбор редакции
10 апреля, 23:45

Managing Risks & Challenges in Picking Stocks

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

Выбор редакции
06 апреля, 17:00

Sunday Specials: French Elections, U.S. Budget Debate

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The two rounds of voting in the French elections fall on Sundays, while the U.S. budget debate that begins on a Friday will likely be settled on Sunday.

Выбор редакции
04 апреля, 16:45

Gold: About to Break Out of Lull in Volatility?

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

03 апреля, 16:30

Copper: Sustained Rally Hinges on China, Trump

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In just over a year, from mid-January 2016 to mid-February 2017, COMEX high grade copper prices soared 45%, erasing about one third of the 58% slump from the peak set in 2011 (Figure 1).  Much of the rebound came after October 2016 and appeared to be supported by three factors. China’s economic growth rate stabilized, and even improved slightly. The election of Donald Trump as President, and the promise of fiscal stimulus. A strike at the Escondida mine in Chile which produces 5% of the world’s copper Copper prices have been falling in recent weeks as each of the rallying points lose steam.  First, the Escondida strike ended on Friday, March 24.  Secondly, the Trump agenda is running into trouble in Congress.  Thirdly, it’s not clear if China will be able to boost or even maintain its growth rate.

Выбор редакции
29 марта, 20:00

Can Yield Curve Foretell a Coming Recession?

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.