Oil

Today we are also publishing a Special Report titled Chinese Auto Demand: Time For A Recovery? Highlights India is the third-largest world consumer of crude oil. Hence, fluctuations in its oil consumption is a non-negligible factor behind global oil…

Pervasive global policy uncertainty continues to fuel USD safe-haven demand. This keeps the Fed’s broad trade-weighted dollar index for goods close to record highs, which continues to stifle oil demand. At present, we do not expect this pervasive uncertainty…

Highlights The manufacturing slowdown, on its own, is unlikely to tip the economy into a recession. The sector accounts for a small share of U.S. output and employment, and will gain a tailwind from a pick-up in global growth. A larger and more stable…

Highlights Geopolitical risks are starting to abate as a result of material constraints influencing policymakers. China needs to ensure its economy bottoms and a debt-deflationary tendency does not take hold. President Trump needs to avoid further…

The price differential at which Canadian heavy-sour crude trades to the North American benchmark WTI will be pushed to -$20/bbl into 1Q20, as transportation constraints continue to slow the marginal barrel’s egress from Alberta. Increasing demand for low-…

Highlights European and global growth will rebound in the fourth quarter but the rebound will lack longevity. Bonds: Expect bond yields to edge modestly higher, especially for those yields that are deeply in negative territory. Underweight German bunds…

Highlights The global manufacturing cycle is likely to bottom soon, and consumption and services remain robust. The risk of recession over the next 12 months is low. This suggests that equities will continue to outperform bonds. But the risks to this…

Oil Risk Is Mispriced…

Overweight Crude Oil And E&P Are Joined At The Hip…

Highlights   Portfolio Strategy Firming relative profit prospects, rising likelihood of an oil price spike and higher geopolitical risk premia, bombed out valuations and extremely oversold technicals all signal that an overweight stance is…