Central Banks, Sugar, Health, Gas, Negative Rates, Railways, Brexit, Agriculture, Law
Welcome to the December 2019 edition of the Ghost In The Machine, which as ever looks at a broad spectrum of topical issues. These range from the latest round of central bank policy easing, through prospects for Sugar markets in terms of price and health trends, the Dutch/European gas market, post Brexit prospects for UK agriculture, challenges for UK rail freight, and the fallout from the judge’s ruling in the Natixis vs. Marex and Access World Logistics case.
Fed and ECB decisions to ease policy in the face of a weaker global economy once again impart an asset allocation bias to equities, given low fixed income yields, but raises questions over stimulus efficacy, ballooning debt levels and indeed financial stability. The Fed flagged its easing as a ‘mid-cycle adjustment’, but would it consider deploying negative rates in the face of a sharper downturn?
EDITORS NOTE Sugar markets remain under a large cloud, but with supply forecasts being reduced and a large ‘short’ position, there may be echoes of 2015. Health concerns have dented sugar consumption trends, but complacency and a failure to challenge false narratives behoves the industry to actively promote its ‘healthier’ sugar initiatives.
As the Groeningen gas field nears the end of its productive life, what are the quality and cost considerations in sourcing replacement supply? The UK’s Agricultural sector faces major challenges not only predicated by Brexit, the question is which subsectors and what factors will determine survival rates.
Anecdotal evidence points to the freight sector creating a lot of stress for the UK rail network, above all via all too prevalent passenger network delays, with a negative impact on the economy. Finally we take a look at Natixis vs. Marex and Access World Logistics ruling, and how it impacts commodity financing, logistics and a broad array of stakeholders
ADM Investor Services International Limited is authorised and regulated by The Financial Conduct Authority. Member of The London Stock Exchange. Registered office: 4th Floor Millennium Bridge House, 2 Lambeth Hill, London EC4V 3TT. Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. This message is produced by ADMISI LME desk and not ADMISI’s Research Department. It is not intended for use by or targeted at Retail clients. Risk Warning: Investments in Equities, CFDs, 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 indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.