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By Bilal Hafeez 09-07-2020
In: post | Newsletter

Exclusives: Primer On Iron Ore Markets / Mass Immunization & Markets / Bullish CNH

(4 min read)
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China’s strengthening economic recovery is one factor that is behind the recent currency strength. It also has significant implications for the iron ore market. At around 4% of global GDP, the iron ore market can be a leading indicator for global activity, particularly as a hedging tool. John Butler lays out iron ore’s macro characteristics in this primer.

Staying with Asia, Caroline Grady continues her fortnightly dive into Asia currency markets highlighting the case for further CNH appreciation and INR’s ongoing divergence from the dismal economic reality in India.   

Dominique Dwor-Frecaut sticks with her bullish outlook for the US, writing on why the prospect of mass immunization by mid’ 2021 could catch US policymakers and markets off guard. Our COVID tracker today details yet another daily high in US COVID cases while we discuss how this is complicating Trump’s re-election bid in our weekly US election tracker.

As a reminder, we also featured several exclusives earlier this week. Mirza Baig wrote on BI’s debt monetization plan, John Tierney continued his series on the underlying weakness in the US labour market and John Butler gave his view on Bitcoin, CBDCs and gold in the race for alternative money.

 

Enjoy!

Bilal

 

Iron Ore: A Primer On The ‘New Crude’ (12 min read) After crude oil, iron ore is the world’s largest traded commodity by both weight and value. At any one point in time, roughly 50% of all global dry bulk shipping capacity is involved in the global steel industry, in particular moving iron ore from where it is mined and refined to where it is smelted into steel.

(John Butler | 9th July, 2020)

 

Asia FX Outlook – Remaining Bullish On China (9 min read) Increased confidence in a V-shaped recovery in China and a sharp rally in Chinese equities have boosted risk appetite across emerging markets. New COVID outbreaks in the US and elsewhere leave ongoing risks that renewed lockdowns will hurt the recovery. 

(Caroline Grady | 9th July, 2020)

 

 

 

Will Mass Immunization Turn Out Negative For Markets? (3 min read) Mass immunization against COVID-19 could begin as early as mid-2021 – sooner than policymakers and market participants expect. And when it does, the US economy will be off to the reopening races. Policymakers could be slow to reduce support, which would see the curve steepen and equity markets sell off.

(Dominique Dwor-Frecaut | 9th July, 2020)

 

Hive Indicators

Global COVID-19 Tracker – Records In Daily Growth In Both DM And EM In the DM world, the US recorded its largest daily increase, standing at 62,117 new cases. It is the second consecutive day with a record in daily cases and is 12.5% increase since last week’s high of 54,205. Daily deaths have also been rising, standing at 900 on Wednesday.

(Bilal Hafeez, Stefan Posea | 9th July, 2020)

 

Coronavirus Update

 

Trump Shadow

 

US Election Tracker – COVID Surge Complicates Trump’s Re-election Bid A new all-time daily record of 62,117 US COVID cases on Wednesday highlights the difficulty in President Trump’s reelection campaign. Any significant bounce back in Q3 GDP data (due for release just 5 days before the election) is contingent upon mobility levels normalizing and America returning to work.

(Bilal Hafeez, Caroline Grady | 9th July, 2020)

 

 

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)