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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EMERGING MARKETS
- While the deceleration in global liquidity and the slowdown in the economic activity have eased the strong momentum in the commodity market, some investors are still confident that oil prices are about to reach new highs in the short term.
- We previously saw that energy commodities (i.e. oil or nat gas) have been the best performers when inflation starts to accelerate; hence, some participants are still buying energy commodities as a 'hedge' against strong inflationary pressures in the near to medium term.
- The chart below shows the average monthly performance of each of the 7 sub-indexes of the Bloomberg Commodity Index (BCOM) when US CPI inflation stands above 2 percent since January 1991 (the inception of some of the sub indexes).
- Hence, if momentum in oil prices resumes in the coming weeks, with the front-month futures contract breaking above its early July high, it could support COP, RUB and MXN (vs. USD), which are still very sensitive to changes in oil prices.
- The table below shows the sensitivity of the major oil producers (>0.5mil bpd) EM FX to changes in oil prices (Brent).
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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