mintdotfinance

mintdotfinance

Interest rates are to asset prices, like what gravity is to an apple, once said Warren Buffet. Low interest rates imply low gravitational pull to asset prices. Similarly, a loose interest regime when faced-off against a fierce monetary stance, can send the former currency deflating at an alarming clip. This paper peeks into the Japanese macro environment. It...

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Boring is better in a recession. Fed Chair reaffirmed his steely resolve to fight inflation. In short, he wants to break the back of inflation "at any cost" to subdue it down to Fed’s target of 2%. Soft-landing is desired. But overcorrection to fend off sticky inflation could tip soft-landing into a hard one. In a recession, economic activities shrink resulting...

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Natural gas was once considered a byproduct of oil production. It is now becoming increasingly important as one of the cleanest burning fossil fuels and a key piece of the clean energy transition. Today, it forms the backbone of global energy production. This paper delves into the supply and demand factors affecting natural gas prices and proposes a long...

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"Volatility gets you in the gut. When prices are jumping around, you feel different from when they are stable" quipped Peter L Bernstein, an American financial historian, investor, economist, and an educator. Crude oil prices are influenced by a variety of macro drivers. Oil market shocks are not rare events. They appear to recur at a tight frequency. From...

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AUD is a commodity currency. Australia’s resources rich economy is heavily influenced by commodity trade, particularly with China. When China sneezes, the AUD catches cold. With the Reserve Bank of Australia (RBA)’s rate hiking cycle approaching an end plus China’s economic recovery remaining anaemic, the AUD is likely to weaken further in the short term. This...

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Ever heard of risk-free rates? Risk free rates are commonly understood to refer to interest rates on 10-year US treasuries. These are considered risk-free as the likelihood of the US government defaulting is considered extremely unlikely. Treasuries pay out a fixed interest and can be redeemed for their face value at maturity. Fixed returns and negligible...

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AI hot; Crypto not! That’s set to change. Bitcoin prices have bounced back even as AI hype hogs the newsfeed. Crypto was disregarded as a product of inflated bull market fuelled by easy money last year. “Risk-on” assets like Bitcoin (BTC) plunged sharply. Subsequent recovery has been refreshingly consistent suggesting a potential resurgence. BTC stands 80%...

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The US Dollar has been thriving on borrowed time. Time has run out. The US Dollar plunged to its lowest in 15-months in what many experts see as the beginning of a secular decline. Till now, A hawkish Fed served as a solid tail wind. A Fed pause will take the wind out of USD sails. The USD peak is behind us. Leveraged funds have repositioned their portfolios to...

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The US Government runs a large budget deficit which in turn has helped enrich several emerging markets by creating a massive market for their products and services. These deficits are financed by issuance of treasuries. Given US’ global heft, treasuries are considered “risk-free” assets, held by institutions and other central banks as reserves. Investors hold...

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What rises, must fall. What comes down, goes up again. This rings most true for crude oil prices. Both secular and seasonal trends are at play in crude oil prices. Demand for oil moves in tandem with global economic activities. Key secular trends impacting oil markets over this decade was covered in our previous paper . These range from falling demand from...

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“We are not addicted to oil, but our cars are”, said a former CIA Chief, James Woolsey. That addiction is on the decline as we pen this paper. Love it, or hate it, but you cannot ignore it. Crude oil powers the planet. When global economy stutters, oil prices plunge. Midway through 2023, crude oil demand appears wobbly on recession overhang and shaky economic...

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In our previous paper , we outlined how investors can use CME's Micro S&P 500 Futures to hedge beta exposure and extract pure alpha. The paper referenced that the Super Sevens stocks (Amazon, Apple, Google, Meta, Microsoft, Nvidia, and Tesla) will continue to outperform the broader S&P 500 index. Not only do these stocks benefit from passive investing and ESG...

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Imagine this. Dark skies, earth tremors and thunder roars. Shelter is top priority. Size matters in a crisis. When the tsunami strikes and lightning splits the sky, investors shudder in fear; But the super seven stand tall, shielding investors from the fury. Dramatic metaphors aside, we truly live in unprecedented times. Risk lurks everywhere. List is endless....

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In global finance, everything is relative. For now, there is no good answer to the perennial question: If not for the US dollar, then what? That is why, despite all its flaws, the dollar remains the ultimate haven currency. And the US Dollar Index (“DXY”) measures the performance of the US Dollar against a basket of six major currencies of USA’s major trading...

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Corn is a versatile crop. It is used in a variety of ways. Corn is a major source of food for humans and animals. It is also an input in industrial products, such as ethanol and plastics. According to the FAO, in the past year, over 1.1 billion tons of corn was produced worldwide. Gross production value stood at $192 billion, second only to sugarcane (1.8B tons)...

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Not too long ago, Gasoline prices rattled American car drivers with a price tag of USD 5 a gallon. And now, much to their delight, gasoline prices have eased to USD 3.50 a gallon. Slump in crude prices which influences gasoline has plunged by one-third over the last twelve months. A barrel of West Texas Intermediate ("WTI") trades around USD 70. Rattled US...

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Corn prices have fallen 14% since the start of 2023. The latest USDA report points to further downside. Corn prices are expected to fizzle with expectations of a bumper harvest combined with tepid demand. The USDA expects a record harvest of 15.27 billion bushels. The 2023/24 forecasts signal rising corn supply boosting ending stocks to their highest level since...

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Some people create their own storms. And then get upset when it starts to rain. US Debt Ceiling drama is akin to a soap opera that never ends. Debt ceiling issue is not new. Why bother now? Political polarisation in the US has got to unprecedented levels. The showmanship could tip over into a political nightmare. It could send economic shockwaves with impact...