EDITORS NOTE Q4 EDITION
Russia’s interference in, and manipulation of global grain markets has not only increased price volatility, but also has profound implications for global flood security, above all for importing countries, though it is debatable whether the proposed BRICS grains exchange will work in practice.
Grains, Sugar, Oil, Volatility, Futures, Options, EUDR, Regulation, Russia, BRICS, Food Security, Elections, Interest Rates, Inflation, Global Debt
Welcome to the Q4 edition of The Ghost In The Machine, as the dust settles on the US elections, UK budget and markets row back on US and UK rate expectations. Agricultural commodities are a key theme ahead of the European Commodities Exchange (ECE) conference in early December.
On the regulatory side, the EU has been forced into delaying implementation of its EUDR (EU Deforestation Regulation), following strongly worded objections from many major countries, we take a look at some of the objections, and the updated EU guidance on implementation.
With the run of elections behind us, there is a look at the outlook for commodities in 2025, with a more detailed view on prospects for Sugar. The CME’s CVOL potentially offers a more holistic view of implied volatility, and also facilitates comparison of curve structures with other markets.
There is also an in depth look at the dynamics of ‘in the money’ options in the oil market. Inflation may have fallen back substantially in most of the world, but in the US it is important to distinguish the implications and importance for the Fed rate outlook of CPI as against the targeted PCE deflator measures.
There are increasing concerns about global debt levels, which as we have moved through the various elections have resulted in an increase in government bond risk premia in major economies, and while many may suggest that this is ‘crying wolf’, there are aspects that imply this time may be different.
THE GHOST IN THE MACHINE
EDITORS IN CHIEF Eddie Tofpik
E:
eddie.tofpik@
admisi.com Marc Ostwald
E:
marc.ostwald@admisi.com
PRODUCTION & CIRCULATION CREATIVE DESIGN Alfred Michelin
Simrat Kaur Sounthe
MARKETING Alfred Michelin
Simrat Kaur Sounthe
ADM CONTRIBUTORS Eddie Tofpik
Edwin Burgers Jamie Kirkwood Jessica Reid Marc Ostwald
Ryan Easterbrook
EXTERNAL CONTRIBUTORS Alberto Peixoto
Anatolios Kazimirov Lou Brien
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ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG. A subsidiary of Archer Daniels Midland Company. The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI. © 2024 ADM Investor Services International Limited.
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