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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.
EM FX
- While the trend in some major commodities has started to falter in the past few weeks (copper, wheat, lumber...), momentum on oil prices continue to look firm, with the front-month futures contract on WTI breaking above $75 today.
- The chart below shows that 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).
- Interestingly, we find that the BCOM Energy Sub index is by far the best performer, averaging over 0.3% in monthly return when inflation rises above 2 percent.
Source: Bloomberg/MNI
- Hence, the momentum in oil prices could continue to 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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