The Ghost in the Machine Q2 2024

Welcome to the Q2 2024 edition of the Ghost In The Machine

Welcome to the Q2 edition of the Ghost In The Machine, the second quarter has delivered some of the expected rate cuts in the developed world, but a Fed rate cut continues to appear elusive.
 
Meanwhile the not unexpected heavy defeat of President Macron’s party in the EU elections has prompted a snap French general election, reviving fears of a renewed Eurozone debt crisis. Be that as it may, there is an in-depth look at how two new EU directives – Corporate Sustainability Due Diligence Directive (CSDDD) and the Forced Labour Regulation (FLR) – may have potentially quite far reaching consequences for EU and non-EU companies, particularly in the commodities sector, above all in terms of due diligence about forced labour and human rights in its value chains.

Sugar continues to ride a roller coaster in price terms, putting even greater emphasis on managing risk, we take a look at how export and output shortfalls from India and Thailand may be offset by Brazil.

In the context of the energy transition, Sustainable Aviation Fuel (SAF) has transitioned in but a few short years from a ‘drawing board’ idea to being the perceived solution in terms of meeting climate targets; but financing the costs, in addition to developing the necessary engineering technology, to scale up production, which remains miniscule, is going to be a challenge.
 
In a similar vein, Soybean Crush is gaining importance for the bio-diesel sector, and demand for risk management products has seen the evolution of exchange traded spread products, so what is available and how can it be deployed in physical and more speculative trading terms.
 
Finally, the focus in terms of the global rates outlook may be on the timing of Fed rate cuts, but how the Bank of Japan manages its very gradual and likely tricky exit from decades of ultra-easy policy may prove to be as significant.
 
Marc Ostwald
Chief Economist & Global Strategist
ADM Investor Services International Limited

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