ALec

Commodity Economist

[Simon Kuestenmacher @simongerman600]

This map shows Switzerland’s four national languages without the uninhabited high mountain areas. Suddenly the country’s linguistic geography makes more sense: German dominates the north and centre, French the west, Italian the south, and Romansh survives in pockets of the east. Source: https://t.co/Q2sC2yIBye

[CropProphet @CropProphet]

The F-test suggests the change is highly statistically significant.

#agwx #oatt

@WorldClimateSvc

[Michael A. Arouet @MichaelAArouet]

Geopolitics is not the only reason investors are leaving China, it’s simply much cheaper to produce in other countries

[Alexander Stahel 🌻 @BurggrabenH]

What do G20 economic data tell us about the demand for commodities?

Firstly, we will likely be in a no growth world in 2024 (despite the 1.3% growth forecast for 2024) due to a weakening US, a weak Europe (certainly Germany & France) as well as a very weak China with little choices which should make for significant headwind for commodities.

Nevertheless, note that Europe - for all the talk of weakness - remains the world's 2nd largest economy by a country mile with a combined GDP of US$22.3trn and a healthy balance sheet (81.5% Debt-to-GDP). Europe also means 31 countries, some of which are in excellent condition. Ireland is one example few understand.

The EU's Fitfor55 laws will make it go "greener" (invest) but expect any deadline to be extended as few countries cannot afford the current EU timelines. @RishiSunak was the first to back-pedal the UK's net-zero targets/subsidies for wind. Others will follow.

The US is a $27.6trn economy for which it uses a lot of leverage (126% Debt-to-GDP) as well as massive fiscal deficits to come - much of it because Biden wants to go "greener" but who knows what the next president wants. The main reduction in CO2 will likely continue to come from natgas replacing coal in the grid.

China's $17.6trn economy (if the Worldbank is correct) has a debt issue! While the Central Gov reports resonable US$8.5trn of debt (47% of GDP), the CCP finances its 5-Year plans with local debt.

If one adds so called local government debt as reported by the Ministry of Finance of the People's Republic, total debt gets to a whooping US$64.7trn or 365% Debt-to-GDP: a world record.

Xi made it clear that he wants to deflate the construction bubble which will turn China into an "exporter of deflation" for years to come. It will also need less commodities - metals certainly. Sadly it does not report country-wide industry capacity utilisations.

As far as I understand, the CCP pushes 2 things: more electricity (from nuclear, coal, wind & solar) as well as BEVs. BYD is the obvious winner here. Does it mean less CO2 emissions? Nope, but China has coal (to power the grid) but must import crude (to power the Otto engine). So it makes a lot of geopolitical sense to push BEVs.

India continues to push ahead (7% real GDP growth; 4.9% CPI YoY), with little signs of a slowdown. It also has little debt. Healthy and with a ton of runway to come with a GDP/capita of US$ 2,311...! Nothing really.

LatAm looks healthy with a strong Brazil or a debt-free Mexico. Let's see what the new president of Argentina can do for the economy (146% CPI YoY)...! That would be an exiting place to invest more in metals or E&Ps.

Japan, Korea & Australia - combined a $7trn economy - look healther than Europe. A source of steadiness in 2024? I guess it comes down to China - again.

Anyway, pick your commodities carefully for 2024. They must avoid a China slowdown issue which I suspect for most metals. Uranium should be the one place where the CCP will invest without interrruption & at full speed.

Precious metals make sense if you believe US nominal rates will contract. I do but it won't come in a straight line. As for all the rest, I'm less clear but Sinopec gave a clear warnings that it expects a slowdown in growth for petroleum products as soon as 2024. Any views out there are most welcome...!

#Economy #Uranium @UrbanKaoboy @DrastikThomas

[ALec @cdtyAL]

China house prices fell again in October. New floor space under construction - now 1/3rd of what was started in 2019/20!
Yet Steel Construction PMI is only mildly -ve (49.6 in Oct), other sectors are boosting demand, steel output, and iron ore imports.
#china #ironore

[CS50 @cs50]

Sometimes coding all night long is all you need. Search for CS50 on YouTube or enroll for free at https://t.co/P1GF3YlqQu.

[ALec @cdtyAL]

US leads LNG exports, mostly to EU+UK
#OOGT

[ALec @cdtyAL]

and long term interest rates - driven by commodity prices, and driving equity valuation

[ALec @cdtyAL]

https://t.co/PksiCexo8p
a bit old by now - was true early 2020, but today the impact of fast rising inflation is already being felt

[James Chao @Jinghe17215567]

One of the big news today is that Brazil has reached an agreement with China to stop using the US dollar as an intermediate currency and trade in its own currency.

My question is, will this macro news push up gold and silver in New York anytime soon?

[ALec @cdtyAL]

and summarizing long market commentary!

[Aadit Sheth @aaditsh]

ChatGPT prompts that'll save you hours a day at work (ranked in order):

[Ben Parr @benparr]

🚨 HUGE news in AI: Google just launched Generative AI across ALL of Google Workspace -- Gmail, Docs, Sheets, Slides, Images -- EVERYTHING.

They made a video showing off the new AI's capabilities. It's AWESOME.

[ALec @cdtyAL]

China led PPI deflation, together with less supply chain disruptions and lower ocean freight impacting EU/US with a few months delay

[ALec @cdtyAL]

Crude oil victim of macro/financial turmoil negativity. Was bound to happen soon from the chart - key levels were breached, resulting in ~10% fall in 2 days

[ALec @cdtyAL]

US CPI: good news or bad news? Headline growth slows, but core keeps increasing (0.5% Feb vs Jan), highlighting labour market strength (seen through rent inflation)
#economy

[ALec @cdtyAL]

Retail sales continue to decline in Europe, Germany in particular, where it's down 7% yoy, and 7% below the pre-covid trend

[Le Chou News @LeChouNews]

New Tesla Software Update Will Drive Your Vehicle Into A Wall If You Even Mention Another Carmaker

[Peak Trading Research @PeakTrading]

It's been a wild, volatile year for #commodity markets. 🌽☕️⛽🌱

[ALec @cdtyAL]

Soybean Oil breaking the 38% Fibo
Food vs Fuel debate becomes less extreme. Eventually will translate into lower food prices

[Stephanie Kelly @StephanieKellyM]

NEW: US EPA confirms our numbers from yesterday, total renewable fuel volumes proposed at 20.82 billion gallons in 2023, 21.87 billion gallons in 2024 and 22.68 billion gallons in 2025.

[ALec @cdtyAL]

OECD revises '23 GDP down for most countries. '22 revisions are more mixed
@OECDeconomy
Full outlook → https://t.co/5GmnDVTa48