Explore Special Offers & White Papers from ADMIS

Macroeconomics: The Day Ahead for 8 March

  • Ukraine Russia war very much front and centre; busy run of statistics overnight nothing more than roadkill; US EIA Short Term Energy Outlook in amid Russia energy embargo threat; Govt bond supply plentiful
  • Financial conditions tightening as money market strains become more  evident
  • Charts: LME Nickel, Brent Crude Future & 6-mth Calendar spread; TTF Gas future; GSCI Commodity Price indices by Sector; VIC Volatility  Index; Euro Stoxx Banks Index; EUR FRA 1×4; USD 3-mth Libor; USD FRA OIS spread; USD 1-mth Reverse Repo Rate; EUR/USD & USD/JPY 3 Month 25 Delta Risk Reversal 

EVENTS PREVIEW

There is a busy run of data today, but none that has any relevance to the fall-out from the war in Ukraine, though the US EIA’s Short-term Energy Outlook (STEO) will be combed for some clues on the impact on the US and world economy of a full embargo (sanction) on imports of Russian energy, even if it were only imposed by the US. However gauging the impact on demand from the Ukraine conflict is at the current juncture limited to trying to second guess what actions consumers and businesses will take to mitigate the impact of sky high energy and commodity prices, with Nickel being proving to be the ultimate bete noir at the current juncture (Russia accounts for 20% of the worldwide supply of high grade Nickel, even if it only accounts for 5% of total Nickel production). For the record in terms of statistics, there are the array of Japan’s Labor Cash Earnings, Current Account and Economy Watchers survey, German Industrial Production and Norwegian monthly GDP to cast an eye over. Ahead lie little more than final Eurozone Q4 GDP and the US NFIB Small Business Optimism. Govt bond supply is plentiful with auctions in Austria, Germany, Netherlands, UK and USA.

While markets had shown only modest signs of stress last week, there were much clearer signs of stress emerging on Monday, as per the array of attached charts on volatility, money market and credit spreads, FX risk reversal skew and financial conditions. To be sure this is hardly surprising given increasing risk aversion, but for those needing to rollover financing of margined derivative positions, this will inevitably force considerable deleveraging, and with volatility skyrocketing the cost of hedging positions via the options markets, there will be some tough choices for fund managers to make in respect of their underlying portfolios. In that respect a close eye needs to be kept on ETFs, as per the most glaring example of the 2020 oil price crash.

To view the full report and to sign up for daily market commentary please email admisi@admisi.com

The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, 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 may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2022 ADM Investor Services International Limited.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, 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 may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started