Greetings,
We begin with the energy markets where crude oil futures rose sharply in response to the first US inventory draw in weeks. Brent was up over 8% in two days, rising above $47/bbl.
Source: @barchart
US gasoline futures rose 5% on Wednesday.
Source: @barchart
The inventory declines driving this rally took place at the Gulf Coast storage facilities. Oil in storage at Cushing, OK (the settlement hub for WTI futures), however, hit a new record.
US crude oil production fell to 8.8Mbbl/d. The question now is whether firmer crude prices will slow these declines, given that a number of shale operations are profitable at these levels.
The global floating crude oil storage inventories have risen sharply. The market remains well supplied.
Source: Deutsche Bank, @joshdigga
Some are suggesting that the recent rally is a seasonal effect and declines are likely to follow. Perhaps.
Source: ?@troylocklear
Separately, a number of nations (such as Iraq) are completely dependent on oil exports.
Source: @wef, @jsblokland
In other commodity markets, sugar futures surged nearly 5% on the day.
Source: @barchart
The next chart suggests that gold prices are still driven by real US rates (as one would expect).
Source: ?@Callum_Thomas
Now let’s shift to China where we are tracking the following trends.
1. The nation’s stock market remains under pressure.
Source: Google
2. Brisk home sales in top cities continue.
Source: Macquarie
3. Price-to-income ratios on Chinese residential properties show frothy valuations in major metro areas.
Source: Credit Suisse
4. China’s headline CPI has been all about pork prices lately. CPI ex-food remains quite low.
Source: Morgan Stanley
Source: @fastFT
As an aside, US pork prices are firming up as well.
Source: @barchart
It’s worth noting that as Taiwan inaugurates the new government, the China-Taiwan tensions will escalate.
Source: Reuters
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