Oil
Despite a strong dollar, rising yields, and falling equities, oil and copper prices have recently risen. Oil has broken out above its 200-day moving average, while copper is currently testing its own. Oil’s bullish price action is explained by…
Every year we highlight five low-odds scenarios that would have a major impact on global financial markets if they happened. This year we contemplate a total reversal of Chinese policy, a US-Iran nuclear deal, a breakdown of NATO, US military action across the Americas, and an internationally coordinated FX intervention.
Our Emerging Markets, China, and Commodities strategy teams published their 2025 joint outlook. Our colleagues remain bullish on the US dollar for now but see rising odds of the Trump administration actively pursuing greenback devaluation. To avoid steep…
- Congress will pass tax cuts by end of 2025 producing a fiscal thrust of about 0.9% of GDP in 2026.
- Trump will count on that stimulus as a basis for slapping tariffs on leading trade partners.
- China will retaliate against Trump and stimulate its domestic economy, while pursuing stronger trade ties with other countries. Europe will also retaliate.
- Geopolitical risk will shift from Ukraine-Russia to Israel-Iran, where the conflict will continue to escalate until a crisis point is reached within 2025.
OPEC+ extended its production cuts for the third time, and lengthened the period over which it plans to bring spare capacity back online. Oil prices continue to trade near the bottom of their trading range despite the announcement. The decision aims to…
Our Commodity & Energy Strategy team evaluated the impact of president-elect Trump’s policies on commodity markets. Trump’s energy policies, while promoting increased domestic oil production, are unlikely to drive immediate growth in US crude output.…
The global political system is destabilizing and the US will turn more hawkish in foreign policy, trade policy, or both, regardless of the election outcome. Tactically go long the dollar.
For the past two weeks, oil has sold off amid a global spike in yields. Oil prices and Treasury yields tend to be positively correlated, as oil prices are a fast-moving component of inflation, driving the inflation expectations component of bond yields. …
Crude prices have been trendless but volatile in 2024. Oil’s choppy price action illustrates the demand and supply tug-o-war in the market. Our bias is for crude prices to weaken on a six-to-nine months horizon. Good economic news such as the resilience of…
We maintain 37% odds of a major recessionary oil shock, 51% odds of minor shocks, and 12% odds of no shocks.