Laden...
In this week’s Real-Time Insights we begin with a special supplement focusing on commodity prices and their implications. Use the following link to access the full set of commodity focused charts: Link to Commodity Focus
Note: Use ‘Link to PDF’ to view the full array of high-frequency, economic, and financial charts covered in this report
Link to PDF: Real-Time Insights, Economic and Financial Pulse
Commodity Focus | ||||||
Summary |
|
|
|
|
|
|
· Russia's invasion of Ukraine, uncertainty over the outcome of the conflict, an evolving slate of sanctions against Russian financial institutions and the Russian Central Bank, and market speculation about how long the war will last and continue to threaten supplies have sent commodity prices soaring and put pressure on already vulnerable global supply chains. | ||||||
· Russia and Ukraine are both major commodity producers and exporters, accounting for large shares of the world's energy, metal, and agricultural commodity exports. Key affected commodities include oil, natural gas, metals (palladium, aluminum, steel, titanium), wheat, fertilizers, and sunflower oil. | ||||||
· European manufacturers are directly hurt by the geopolitical fallout and drop in trade with Russia; several auto manufacturers have been forced to cut production in their European plants due to parts and material shortages. The rapid and broad-based imposition of sanctions on Russian financial institutions has directly impacted trade flows and also prompted a degree of “self-sanctioning” in which non-Russian entities pull back from transactions with Russian companies, further affecting international commodity and trade flows. | ||||||
· While the conflict and sanctions are undoubtedly causing domestic pain for Russia, sanctions thus far have largely spared Russian entities affiliated with oil and gas exports. That may change. The U.S. is considering a ban on Russian oil imports, but Europe is not. Retaliation from Russia, which provides a large share of Europe's natural gas supply, is uncertain. | ||||||
· Rising energy, agricultural commodity, and fertilizer prices will have a significant impact on emerging markets, particularly those that are net importers of foodstuffs. In particular, many countries across the Middle East and North Africa are reliant on wheat imports from Ukraine and Russia, and disruptions to that supply could prompt a near-term food crisis. Simultaneously, the rise in fertilizer prices over the last six months has lifted costs for farmers who have cut back on usage, with negative impacts on crop yields. | ||||||
· Uncertainty and the threat of prolonged armed conflict are likely to weigh on Ukrainian farmers, many of whom will cancel or cut back on spring planting. Disruptions to trade and the movement of goods will also restrict the ability of Ukrainian farmers to acquire seeds and required machinery, further impacting agricultural production. | ||||||
Real-Time Insights | |||||||
Highlights |
|
|
|
|
|
|
|
· The number of seated diners from reservations slipped to ~4% below the pre-pandemic average nationally, according to data from OpenTable, and declines were relatively broad-based across states. Although the number of people dining at restaurants has largely recovered from an omicron-induced slump, to what extent might rising prices and fading consumer confidence dampen the resumption of normal activities? | |||||||
· U.S. mobility trends largely flattened over the last week and remain above their pre-pandemic baseline, but are generally below the levels reached in the summer of 2021. Rising energy and fuel prices may dent driving. | |||||||
· U.S. workplace visits continue to trend up, according to data from Google, and the seven-day moving average is now just 17% below its pre-pandemic level. Hybrid/remote work and the increased flexibility employers have offered to employees to attract and retain talent may have led to a secular downward shift in workplace mobility data. | |||||||
· The Baltic Exchange Dry Index, a measure of the shipping costs of raw materials and commodities, spiked up at the end of February, reflecting rising fuel costs and Russia's invasion of Ukraine, which have disrupted the movement of goods. | |||||||
· Retail and recreation mobility ticked up over the last week but remains well below its pre-pandemic baseline. Notably, mobility was depressed through January, a month in which retail sales jumped up, reflecting the shift to online spending over the course of the pandemic. | |||||||
· The number of drilled but uncompleted wells (DUCs) in the U.S. has declined sharply over the last two years, falling to just 4.5k in January. It takes several months to “complete” a well, which, paired with the relatively low inventories of DUCs, limits how quickly U.S. producers can lift production in the near term. | |||||||
Week ahead: Consumer Credit (Mar 7); Trade Balance (Mar 8); JOLTS Report (Mar 9); CPI (Mar 10); U. of Mich. Consumer Sentiment & Inflationary Expectations (Mar 11) | |||||||
Link to PDF: Real-Time Insights, Economic and Financial Pulse
Mickey Levy, mickey.levy@berenberg-us.com
Mahmoud Abu Ghzalah, mahmoud.abughzalah@berenberg-us.com
© 2022 Berenberg Capital Markets, LLC, Member FINRA and SPIC
Remarks regarding foreign investors. The preparation of this document is subject to regulation by US law. The distribution of this document in other jurisdictions may be restricted by law, and persons, into whose possession this document comes, should inform themselves about, and observe, any such restrictions. United Kingdom This document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers. Copyright BCM is a wholly owned subsidiary of Joh. Berenberg, Gossler & Co. KG (“Berenberg Bank”). BCM reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without the BCM’s prior written consent. Berenberg Bank may distribute this commentary on a third party basis to its customers
Member FINRA & SIPC
This email and any files or attachments transmitted with it may contain confidential or privileged information and are intended solely for the use of the intended recipient. If you are not the intended recipient, please do not copy, retain, disclose or use any part of the message or its attachments. Please notify the sender immediately by return email and destroy or delete any copies. Dissemination or use of this information by anyone other than the intended recipient is unauthorized and may be illegal. Communications by email cannot be guaranteed to be secure or error-free. Emails and their attachments are subject to being intercepted, becoming corrupted, getting lost or delayed, or may contain viruses. Therefore, neither the sender nor Berenberg Capital Markets LLC (BCM) accepts any liability for any errors or omissions in the content of this message or problems in its transmission, including those arising as a result of its transmission over the internet.
BCM does not assume liability for the correctness and completeness of all information given and/or attachments contained herein. The provided information has not been checked by a third party, especially an independent auditing firm. BCM explicitly points to the stated date of preparation. The information given can become incorrect due to passage of time and/or as a result of legal, political, economic or other changes. BCM does not assume responsibility to indicate such changes and/or to publish an updated document. Any document(s) or attachment(s) is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers.
In light of upcoming regulatory changes, please be informed that BCM will continue to share information with you until unsubscribe@berenberg-us.com receives your termination/deletion request. For more information about the General Data Protection Regulation (GDPR) and our privacy policies please refer to https://www.berenberg-us.com/legal-notice. BCM reserves all the rights in this communication. No part of this communication or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without BCMâs prior written consent.
The information contained herein and sourced may have been adopted from various news sources, for example, Bloomberg, Reuters, Street Account and various other sources. BCM does not claim accuracy, completeness, timeliness, suitability, or otherwise regarding all the information on the securities, stock markets, or developments referred to within. On no account should the Content be regarded as a substitute for the recipient procuring information for himself/herself or exercising his/her own judgments. BCM is not responsible for any recipient(s) use of this information. This Content is not a solicitation or an offer to buy or sell any of the securities contained herein. This information does not constitute a recommendation or take into account the particular investment objectives, financial situations, or needs of clients. Clients should consider whether any advice or recommendation in this Content is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of securities which may be referred to in this Content and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain securities.
Laden...
Laden...
© 2024
