Singapore Sales Trader
Summary: Divergence began to appear since last month as both XAU and HG looked to have bottomed out and make multi months swing highs but CL continued to decline making a fresh low for the year breaking the double bottom $75 this week.
My sales trading team members well and truly know that I am a fan boy of Cathie Wood whose flagship fund ARKK generated huge 149% return in 2020 but this year so far YTD return of -64% on the back of QT and challenging macro backdrop as real yield soared from -1% all the way upto 1.59%, highest since 2009. I remember this tweet from Cathie that flagged the inflation expectations by looking at commodities such as gold (XAU), copper (HG) and oil (CL) which were already on their way down after all three peaking in March 22 while CPI peaked later in July at 9.1%. However divergence began to appear since last month as both XAU and HG looked to have bottomed out and make multi months swing highs but CL continued to decline making a fresh low for the year breaking the double bottom $75 this week. On the other hand, silver (XAG) and iron ore (SCO) are also showing reversal to the topside with +32% and +49% respectively so in line with the recent house view from Steen, resurgence of major commodity strength may have already begun in the anticipation of China reopening.
Some findings
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy
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