Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
Welcome to the Q1 2024 edition of the Ghost In The Machine
Welcome to the Q1 Edition of the Ghost In The Machine, as the world continues to be blighted by disruptions, national and geopolitical risks remain all too evident, above all the tragic and brutal conflicts in the Ukraine and Gaza, and yet risk appetite appears to remain robust, despite the push back on central bank rate cut timelines.
In this edition, there is a general discussion about investor sentiment towards agricultural commodities after a turbulent 2023, with a deeper dive into the Sugar market, which is looking for some direction, above all given the challenges in formulating demand estimates.
The EU’s ‘Regulation on Deforestation-free products’ (aka EUDR) came into force in June 2023, we take a look at the timelines for implementation, the differences to the EU Timber regulation that it replaces, and how this has been a key aspect of the spectacular rally in Cocoa.
Following ADM ISI’s acquisition of DCA Finance, our new colleagues delve into the world of potatoes, be that the increasing weather-related disruptions to output, the increased demand to hedge risk and accompanying challenges, and how President Macron’s has been attempting to put the ‘French’ back into fries.
Economic data drives markets, perhaps none more so than the monthly and weekly US labour data. It is typically taken at face value, despite frequent and sometimes substantial revisions, and post-pandemic has defied widespread expectations of a sharp rise in Unemployment as interest rates have risen sharply. But does this offer a true reflection of what is actually happening in the US labour market, or do appearances deceive?
A hefty burden is being placed on improved efficiency as the energy transition gathers pace, but as the Jevons Paradox highlights, the really big political and cultural challenge lies in preserving, and not consuming these efficiency gains.
Marc Ostwald
Chief Economist & Global Strategist
ADM Investor Services International Limited
Chief Economist & Global Strategist
ADM Investor Services International Limited
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