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Macro Afternoon

Nordea with the note:

A couple of weeks ago we moaned about not being able to focus on proper macro strategy due to a cocktail of bodega-virology and cynical political analysis being more important than economic fundamentals – and then an energy crisis emerges. We have talked about the risk of a stagflationary development due to global (or maybe in particular European) energy politics for a while, but it’s as if nobody has cared until the actual practical problem has now materialised. No one is talking about Evergrande anymore after surging gas and coal prices have taken the limelight; therefore we decided to take a deep dive into global inventory levels during the week. We were frankly shocked by the findings as stocks are low no matter where you look (maybe except for the US) heading into the winter, which means that we may not have seen the worst of this energy crunch yet.

German inventories of natural gas are scarily low ahead of the heating season where we usually rely on the inventories. Gazprom’s major storage sites in Germany (Katharina, Jemgum, Redhen and Etzel) are shockingly low already, which means that inventories will run frighteningly close to zero by mid-March 2022 if the usual seasonal patterns unfold over the winter.

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