I never
attempt to make money on the stock market. I buy on the assumption that they
could close the market the next day and not reopen it for ten years.
Warren
Buffett.
With “peace talks” due to take place in Turkey today between
the Foreign Ministers of Russia and the Ukraine, it was time for “profit taking”
in many commodities, now that the margin call panic buying was over.
Still, while peace is unlikely, an uneasy truce might just
be possible, given what seems to be a new stance on joining NATO coming out of
Kiev. In this most unnecessary war, we wish Turkey, Russia and Ukraine every success
in ending this appalling new European war.
Every European war since the Franco-Prussian war in 1870-71
has widened before ending, with two of them going on to become disastrous World
Wars.
This
old commodities dinosaur well remembers the manic commodities markets of the
inflationary 70s, where markets went limit up, limit up, limit down.
This
time round we have a grains and food oils shock on top of an oil shock. Far more
fiat money in circulation thanks to the Magic Money Tree forest discovered in
March 2020, plus vastly more computer and algo trading, while in the stock
casinos, the high frequency trading algos are specifically set up to front run
the order stream!
Since
most commodity trading is a zero sum game, meaning mostly there’s a loser for
every winner, it will be interesting to see where the losers come crashing out
of the sky as we approach month-end and end of quarter.
Asian shares surge as
Russia-Ukraine talks buoy sentiment
March 10, 2022 2:26 AM GMT
BEIJING, March 10 (Reuters) - Asian
shares surged on Thursday, tracking Wall Street's gains as planned diplomatic
talks between Russia and Ukraine buoyed sentiment, although analysts warned the
rally could be susceptible to a sharp reversal as risks remain.
Oil prices also regained some
footing, having fallen more than 12% on the previous session as United Arab
Emirates pledged to support hiking oil output to ease mayhem in energy markets.
MSCI's broadest index of Asia-Pacific shares outside
Japan (.MIAPJ0000PUS)
gained 1.6% in early trade. Japan's Nikkei (.N225) surged
3.4% while Australian shares (.AXJO) were up 1%.
Chinese blue chips (.CSI300) rose
1.96% while Hong Kong's Hang Seng index (.HSI) rallied
1.8%.
"Comments out of Russia and
Ukraine are leading to some hope that compromise is possible," said Ray
Attrill, Head of FX Strategy at National Australia Bank in a note on Thursday.
Russia's foreign minister Sergei Lavrov arrived in
Turkey ahead of planned talks on Thursday with his Ukrainian counterpart Dmytro
Kuleba for what will be the first meeting between the two since Russia invaded
Ukraine two weeks ago. read
more
Attrill added Ukraine's
accusation of Russia bombing a hospital in the city of Mariupol and fears of
radiation leaks at Ukraine nuclear sites could risk further retaliation from
Western nations.
U.S. crude ticked up 1.37% to $110.19 a barrel, while
Brent crude rose 2% to $113.2 per barrel.
European Union leaders will
phase out buying Russian oil, gas and coal, a draft declaration showed on
Thursday, as the bloc seeks to reduce its reliance on Russian sources of
energy. read
more
The United States banned oil and
gas imports from Russia on Tuesday, while Britain said it would phase out
Russian oil imports by the end of the year.
Higher energy prices will
reinforce expectations that the U.S. Federal Reserve will raise interest rates
by 25 basis points at its policy meeting next week to tame runaway inflation.
Data due later on Thursday is
expected to show U.S. consumer inflation racing at a 7.9% annualised clip,
according to a Reuters poll.
Nickel prices and oil uncertainty
show nobody is sure about anything right now
March 8, 2022 Updated March 9,
2022
Commodity markets are struggling to catch up to a
world turned upside down by war and sweeping international sanctions against
Russia.
The London Metal Exchange, a key global price
setter for industrial metals, suspended nickel trading on Tuesday after prices
more than doubled. Wheat, copper and gold have also been on a tear, while oil,
the single most important commodity to the global economy, continued its
relentless climb after U.S. President Joe Biden banned the import of Russian
fossil fuels to the United States and Britain declared it would phase out
Russian oil by the end of the year.
The combination of an unpredictable war, expanding
sanctions and booming prices is resulting in an unprecedented wave of
uncertainty for commodity producers and investors.
True, there have been supply shocks before – the
oil crises of the 1970s being prime examples – but those typically affected
only single commodities and were the decisions of key suppliers such as the
Organization of Petroleum Exporting Countries (OPEC). It is difficult to recall
another case in which a major supplier of a wide range of raw materials was
abruptly shunned by its major customers.
“What we are seeing at the 50-year anniversary of
the 1973 OPEC supply shock is something similar but substantially worse – the
2022 Russia supply shock, which isn’t driven by the supplier but the consumer,”
Credit Suisse investment strategist Zoltan Pozsar warned in a note Tuesday.
The size of the Russian shock reflects the enormous
range of commodities the country produces.
“Russia’s central role in global commodities both
in depth and breadth is so significant that … the conflicts under way will be
transformative,” Edward Morse, global head of commodity research at Citigroup,
said in a presentation this past week.
Russia is the world’s third-largest oil producer
and the supplier of about 40 per cent of Europe’s natural gas. According to
Morgan Stanley, it also accounts for 12 per cent of global production of
high-grade nickel, a key ingredient in stainless steel and batteries.
Add in the economic impact of the Russian invasion
on Ukraine and the implications for world markets grow even larger. Together,
Russia and Ukraine are responsible for 28 per cent of global wheat exports, by
Citigroup’s estimate. They are also top-tier producers of myriad other
commodities ranging from fertilizers and barley to palladium and lumber.
Threaten that supply and many markets are left
looking into an abyss. The speed with which sanctions have been imposed on
Russia has stunned traders. The uncertain course of both sanctions and
central-bank policy only aggravates the uncertainty.
“Nothing sounds crazy any more,” wrote Michael
Tran, a commodity specialist at RBC Capital Markets, in a note Tuesday. He
added “it is not unfathomable for [oil] prices to rocket to US$200 a barrel by
summer, spur a recession and end the year close to US$50 a barrel.”
This is not his base case, he stressed, but it is
not out of the question, given the stresses in the oil market and the wider
economy.
Barring a negotiated peace in Ukraine, surging
commodity prices are likely to turn up the heat even higher on already red-hot
inflation readings in Canada and the U.S. But exactly how policy makers will
respond is open to question.
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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