The macroeconomic outlook is deteriorating, and in our view, Europe and the UK are in recession already, and the US will be 6 months behind. Higher interest rates, in conjunction with elevated energy and electricity prices, are squeezing households’ disposable income, and new mortgage rates are considerably higher and are now a fixed cost to the consumer. We expect end-user demand to decline, and this will have an impact across the whole supply-chain; although material availability is poor for metals with bonded and exchange warehouses low in stock, this will lead to a dislocated market and volatile price action in spreads, while the macro impacts the flat price. The 20th Party Congress has ended, and their COVID policy is here to stay. As a result, sentiment in China has declined, and if the output of refined materials rises, this will put further pressure on prices. The Fed has increased the rates by 75bps with 50bps to come, but investors are looking at where they pivot, and any dovish language will cause a selloff in the dollar, giving rise to metals prices. If Chinese demand returns and the dollar weakens, this could present significant volatility and price rises, compounded inflationary pressures.

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we look into the Norwegian economy as the Norges Bank chose to reduce its pace of tightening. We highlight key trends for the economy which became the largest producer of oil and gas in Europe, following the cut-off from Russia.

Our analysis takes a deep dive into the coffee market and how there is a large disconnect between flat price movements and spreads. The macroeconomic issues are causing the flat price to consolidate and whipsaw around, as the spreads highlight the low inventory and tight fundamentals. Currency risk and higher rates have dominated markets as the global economy slows, but where do we see prices heading?

Our analysts provide an insight into the Electric Vehicle and Battery Material Market. They give an update on how the energy industries in major regions are transitioning towards renewable alternatives, new policies to support EV sales, and a fundamental outlook for Nickel, Cobalt, and Lithium. Supply-chain bottlenecks and strong EV consumption have meant a sharp increase in the prices of materials and chemicals. Will this continue?

Our FX Options Report contains commentary and analysis covering OTC currency option pricing, volatility and positioning. This week’s focus is on USDPLN and the impact on the economy following the surprise pause during the latest central bank meeting. 

Our daily commentary, covering market news and closing prices of LME aluminium, copper, lead, nickel, tin, zinc, iron ore, steel, and precious metals.

Technical analysis and charts for the key sugar, cocoa and coffee contracts.