The Ghost in the Machine Q4 2021

Welcome to the December 2021 edition of the Ghost In The Machine

As yet another tumultuous year draws to a close, we take a look at a broad spectrum of topics from agricultural commodity outlooks through FX pricing, central bank policy impacts, hydrogen to shipping. The drought and frosts in Brazil have helped to underpin sugar prices for much of the year, but what are the prospects for the coming season, and in other key producing countries? Wheat has many uses in the food and animal feed sectors, but has it been ‘the’ or just ‘a’ key driver of food price inflation?

The FX market is by far the largest volume market, we take a closer look at how brokers and bank liquidity providers work together in price formation. As inflation pressures mount, central banks are signalling a less accommodative policy stance, but how much will this undermine the strong inflows into equity markets that have been so evident in 2021. Shipping is the lifeblood of international trade as has been so evident during the pandemic, but what are the key aspects of the challenges and opportunities as the pressure to rapidly decarbonize the industry as part of efforts to meet climate change targets mount? ‘Vessel identity fraud’ is to shipping what ‘money laundering’ is to banking, and is becoming increasingly sophisticated as it seeks to avoid the gaze of industry watchdogs.

Hydrogen has moved rapidly into the centre of efforts to meet climate change targets, with what is for the layman a rather confusing array of colours, which have significantly different production costs and environment impacts. Finally, we offer some perspectives on how the pandemic has exposed the fragilities of the global economic modus operandi, and what challenges these present to the recovery and climate change efforts. 

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.

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