SOURCE: Derivatives Special Report
SOURCE Derivatives Special Report provides expert analysis and information on the derivatives markets and provides insight into the large and complex challenges being faced by the global derivatives industry. SOURCE Derivatives Special Report strives to identify emerging risks and mitigation strategies, while covering the fascinating people who drive the industry forward. The magazine will be published in June and November 2015 and quarterly from 2016 with the launch of our website, sourcederivatives.com in September 2015. SOURCE Derivatives Special Report is the leading analytical publication on derivatives, providing a detailed study of theoretical models and how they are used in practice. SOURCE Derivatives Special Report gives you results-oriented analysis and statistical information on derivative products and techniques.
SOURCE Derivatives Special Report provides
expert analysis and information on the derivatives
markets and provides insight into the large and
complex challenges being faced by the global
derivatives industry.
SOURCE Derivatives Special Report strives to
identify emerging risks and mitigation strategies,
while covering the fascinating people who drive
the industry forward.
The magazine will be published in June and
November 2015 and quarterly from 2016 with
the launch of our website, sourcederivatives.com
in September 2015.
SOURCE Derivatives Special Report is the
leading analytical publication on derivatives,
providing a detailed study of theoretical models
and how they are used in practice.
SOURCE Derivatives Special Report gives you
results-oriented analysis and statistical information
on derivative products and techniques.
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COMMODITIES REVIEW<br />
Commodities<br />
see broad sell-off<br />
For commodities, the year 2014 has so far been<br />
characterised by a broad based sell-off, which<br />
gathered pace in the mid-summer. Energy, agricultural<br />
and industrial commodities have all<br />
experienced weakness this year, and while gold<br />
was virtually flat for the first three quarters,<br />
the recent rise in the US dollar has also put<br />
downward pressure on the yellow metal within<br />
the past few months.<br />
Slow growth weighs<br />
Crude oil prices were under pressure as global<br />
demand for oil turned out to be slower than expected,<br />
owing to weaker growth in China and<br />
Europe as well as abundant supply. The main<br />
source of supply growth continued to be the<br />
US as a result of the shale oil boom, enabling it<br />
to rival the likes of Russia and Saudi Arabia in<br />
oil output. The fall in oil prices is also having a<br />
dampening impact on global inflation with US<br />
gasoline prices approaching their lowest levels<br />
for some years.<br />
Slow Chinese growth has also pushed down<br />
industrial metal prices such as copper, against<br />
concerns over flagging demand. With China<br />
accounting for some of the world’s copper<br />
demand, the base metal has been particularly<br />
sensitive to disappointing Chinese data. In<br />
addition, the strengthening dollar has also<br />
weighed on copper prices over recent months,<br />
and base metals in general.<br />
62<br />
In addition, the dollar’s rise has been<br />
weighing on gold, as it too has become more<br />
expensive for foreign buyers with its safe-haven<br />
status failing to boost the price despite the<br />
recent escalation in geopolitical concerns.<br />
Oversupply<br />
Agricultural commodities have experienced<br />
particular weakness with key prices touching<br />
four-year lows.<br />
The chief reason for the weakness in agricultural<br />
commodities is simply that markets<br />
are facing oversupply this year. Corn is a case<br />
in point, with favourable growing conditions<br />
putting the US on course to register a record<br />
harvest this year.<br />
And weak prices across such staple agricultural<br />
commodities could provide another<br />
important dampening impact on global<br />
inflation in the months ahead, depending on<br />
how much of the price falls get passed on to<br />
consumers.<br />
DR_Commodities Review.indd 62 21/10/2014 19:22
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