The Ghost in the Machine Q3 2023

Welcome to the Q3 2023 edition of the Ghost In The Machine

Welcome to the Q3 edition of the Ghost In The Machine, as the first relatively normal summer holiday season since the outbreak of the pandemic draws to a close, but at the same time one which has also seen a further sharp increase in very adverse weather events across the world.
Biofuels markets have matured considerably over the past two decades, thanks to the evolution of minimum content requirements, but how will the regulatory backdrop need to evolve as the decarbonization of maritime transport gathers pace?
Our retiring colleague Howard Jenkins looks back at the enormous changes to, and the evolution of commodity trading over the past 40 years. In that vein, a recent case in Canada has highlighted how emojis have crept into commodity trade communications and can lead to misunderstanding about what has actually been agreed.
Central banks have been major buyers of gold for their FX reserves for many a year, but with Q2 purchases dropping sharply, what is the outlook? In a rather mixed year for agricultural commodities, Sugar has been a strong performer, but how will El Nino impact output in major exporting countries, and by extension the overall supply and demand outlook?
The strength of labour demand in the developed world, above all in the US under President Biden, against a backdrop of sharply rising interest rates, has taken many by surprise, but how does this compare with previous presidencies? The world economy has reverted to a more normal if far from stable, pattern of operation after the huge supply disruptions due to the pandemic and the Russian invasion of Ukraine.
The sharp rises in interest rates and an array of generally reliable indicators have been predicting recession in many countries for a year or more, but is our fixation on these metrics a little too Pavlovian?
Marc Ostwald
Chief Economist & Global Strategist
ADM Investor Services International Limited

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