The big rally in gold over the past few market sessions has caught my eye. It has happened at a time of dollar stability, of increasingly deflationary news, including October’s negative month-on-month CPI reading from the US, and as other commodities have failed to gain traction. Thus, the near-20% move we have seen in bullion, [Read more...]
Last Saturday was a sad day for world trade, with Somali pirates seizing a Saudi-owned tanker carrying US$100 million worth of oil. The Sirius Star was hijacked 450 miles off the coast of Kenya, becoming the largest vessel ever hijacked.
If you thought that piracy was the stuff of old swashbuckling tales, think again. Indeed, [Read more...]
Looking at EM equities these days, one can easily overlook the woods for all the trees. Aside from short-term bounces here and there, the overall direction of stocks continues to point downwards. However, I have started to frequently come across comments such as ‘stocks are oversold’, and ‘valuations are highly attractive’. Well, that may be [Read more...]
Having depreciated by more than 38% against the US dollar year-to-date, the South African rand remains one of the worst-performing, major EM currencies. Even the Brazilian real and the Turkish lira, down by 25% and 31% respectively, cannot match the rand’s disastrous performance. While strengthening from a six-and-a-half-year low of ZAR11.8550/US$ on October 22, the [Read more...]
Here we are again. Another global economic slowdown, another spike in global risk aversion, another collapse in soy prices, and another Argentine sovereign default. Or at least that’s what the 1-year CDS is pricing in, currently trading at 4,615 basis points. That’s no joke – it now costs US$461,500 to insure US$1mn against an Argentine [Read more...]
In recent years, Latin American economies have benefited from booming US consumer growth, high commodities prices, and ample global liquidity, helping the region post an estimated average annual real GDP growth rate of 5.1% between 2004 and 2008.
Now, however, the tide is turning rapidly, and I am expecting growth to fall to 4.6% this [Read more...]
A few months ago, discussions about the trajectory of oil prices were overwhelmingly focused on new ‘super-spikes’ to US$200 per barrel. Now, however, prices have come off the boil, and this has prompted my colleagues and I to speculate on the possibility of a drop to US$50/bbl by the third quarter of 2009. How might [Read more...]