Posted On 27 Dec 2016
27/12/2016 In 2016 we got many things right. China didn’t collapse. Brazil rallied hugely. The US Dollar went up. Bonds sold off. Emerging Market currencies sold off, except for the Russian Ruble. We were on the wrong side of Brexit, but still managed to take advantage of a falling GBP. We hoped that Trump wouldn’t win the US elections as that would change many dynamics. But he did win and some changes will happen and on many others even his administration will be constrained. These are our thoughts on what 2017 may have in store for us: USD We are probably more than ¾ of the way in the US Dollar rally. Infrastructure spending under Trump will push up US rates and US Inflation more significantly compared with European Rates and European Inflation. But the weaker EUR, GBP, JPY and weaker EM currencies will feed inflation all over the world.
Posted On 29 Nov 2014
There is such a thing as good and bad inflation, good and bad deflation and how this impacts economies. OPEC decided not to cut production this week and this has far reaching consequences for the global economy and different countries. China, Japan, India, Europe and the United States are big importers. Cheaper oil and oil derivatives means lower inflation and more money in the pockets of consumers in these countries and one hopes more spending in other parts of the economy. Consumers in counties that produce oil also benefit. For industry the materials, airlines, consumer sectors all benefit. Miners also benefit because energy costs are a big part of digging and refining metals. Absolute prices of commodities should decline, but profit margins may not. Demand for commodities may rise as economies are given the energy stimulus in addition to cheaper money, because inflation declines everywhere. China and India will cut