mintdotfinance

mintdotfinance

Seasonality is pervasive in financial markets. Some are benign while others are not. The “September Effect” refers to a month when equity returns gets crushed. Typically, this is followed by a volatile October. Other well-established pattern in equity markets is the "Santa Claus Rally" which is known to occur during December. Equities go bullish with increased...

mintdotfinance

El Niño means little boy in Spanish. The fishermen in Latin America observed periods of unusually warm water in the Pacific Ocean in the 1600s around Christmas. El Niño can cause 50% variation in local weather in regions growing essential crops like beans, corn, and coffee. Soybean is a giant in global trade. It ranks among the top comprising more than 10% of the...

mintdotfinance

Despite unprecedented rate hikes up to 450 basis points over the last 12 months the Euro has lost ground to the US Dollar for the last nine straight weeks. As a result, the Eurozone interest rates are historical highs. Currencies desire nothing more than higher rates. The Euro should have popped but instead it flopped after the ECB’s rate hiking decision last...

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...

mintdotfinance

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...

mintdotfinance

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...

mintdotfinance

"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...

mintdotfinance

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...

mintdotfinance

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...

mintdotfinance

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%...

mintdotfinance

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...

mintdotfinance

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...

mintdotfinance

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...

mintdotfinance

“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...

mintdotfinance

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...

mintdotfinance

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....

mintdotfinance

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...

mintdotfinance

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)...