Three mighty macro narratives on collision course for markets

It is fascinating to watch macro analysts diverge into three distinct narratives covering the future of this business cycle. Conveniently for us, the three narratives are represented to three investment banks’ views. The first we might describe as “good news is bad news”. It’s captured by Bank of America which sees overwhelming US fiscal support


Why iron ore might crash

China’s growth numbers were out yesterday afternoon and were very interesting indeed for the commodity analyst. The headline numbers looked out of this world on base effects, even year-to-date numbers. Fixed asset investment was up 35%. Industrial production up 35.1% and retail sales up 33.8%: However, these numbers are going to tumble all year as


Three week “commodity supercycle” over

I have noted many times how hysterical markets have become in the last year. The Amphetamine Cycle, as I’ve labelled it, has proceeded through a decade of typical market phases in one year. An economic shock. Market crash. Massive stimulus. Market crash up. Inventory cycle. US dollar boom then crash. Gold boom and bust. Tech


RBA commodity index booms

The Reserve Bank of Australia (RBA) has released its index of commodity prices for the month of February, which continues to boom. The commodity price index rose by 3.6% in February in Special Drawing Rights (SDR) terms – the key determinant of Australia’s terms-of-trade – to be up 19.6% over the quarter and 23.9% year-on-year.


See ya, don’t wanna be ya. Chinese FDI crashes, barley exports boom

One can view Australia’s economic relationship with China as evolving in two distinct phases. The first phase transpired from 2003 to 2011 and focused mostly on commodity exports. The second phase began as the first went bust and activity shifted to services exports, people flows and investment. With that second wave came unwanted influences such


Goldman’s bullish oil case

Goldman is pumping this one like there is no tomorrow: The rally in oil prices has paused after Brent prices briefly reached the $65/bbl summer forecast we first set-out last August, on the realization that frigid US weather will only marginally tighten the global market and over concerns for a return of Iranian barrels. Despite