Stephen Innes
SPI Asset Management
Putting aside last night's oil spill, two key drivers should keep markets supported, Russian production declining and Chinese mobility indicators rising.
On the broader macro landscape, global data, for the most part, augers for some landing other than hard that should keep the dollar on the defensive and favourable for oil prices.
The Fed-generated deflation was the most significant driver of price downside, but with the Fed finally downshifting as inflation eases, that is a subplot positive.
But as the markets wait for factual details of those two primary solid catalysts( China + Russia), price action is likely to lag positive news but react aggressively to recession risk, any post-LNY downside in Chinese restocking demand or upside in Russian production.
Once again, investors could be shifting the burden of proof toward visibility on bullish fundamentals before being willing to deploy risk above current ranges.
We are coming off a year where investor returns were generated through carry via higher backwardation rather than through smooth trending higher spot prices. Passive investors are looking to play again, but it could be an H2 story once Fed terminal rate has passed.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
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