The Ghost in the Machine March/April 2019: Financial Markets Dislocations; Key Issues in Energies

Welcome to the April 2019 edition of the Ghost In The Machine, which unsurprisingly has a strong focus on the remarkable Q1 performance of financial markets. 

It also looks across a broad spectrum of issues in commodity and energy markets, with a focus on the grains markets in Russia and Ukraine, and It would be easy to ascribe the Q1 rally in bonds and equities to the ostensible Fed  and ECB u-turns, but a much closer look at some underlying themes is needed.  Thus we consider how stock indices have largely ignored a weak quarter for quarterly earnings and a stream of weak economic news around the globe; consider how QE has moved from being termed unconventional in monetary policy to ostensibly being a key instrument now, and for the foreseeable future. Q1 also and increasing level of G3 central bank debate and dissent about the efficacy and longer term impact of QE, ZIRP and NIRP on asset prices. 

We also consider how core market liquidity continues to deteriorate, as well as what impact the run of holidays in the middle of Q2 may have on markets.

Russian Wheat output and supply has been a key element in how wheat prices have performed over the past few years, and will likely be critical in the coming year. Agriculture is the mainstay of the Ukrainian economy, but only latterly are hedging strategies deployed elsewhere getting traction, and offering business opportunities. In broader terms options strategies which are frequently used in metals and energy trading may have applications in the agricultural sector. We also look at the impact of US resuming energy exports on the world’s oil markets, consider how the US/China tussle over Huawei impacts commodity markets, and ponder why some fund managers remain rather too sceptical about technical analysis as a trading tool.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now