Are precious metals getting more precious?

Posted on 02. Jul, 2014 by Jean Jacques Ohana in Weekly Focus

The dynamic of the gold’s constellation has considerably improved over last weeks. The trend indicators of gold, silver, palladium, platinum and gold miners are represented in figure 1. All of these markets have at least a correlation of 50% to gold and many of them have actually led gold in the rally.
Following geopolitical tensions with [...]

What are the implications of the commodities’ debacle?

Posted on 15. Apr, 2013 by Jean Jacques Ohana in Weekly Focus

Commodities have been the poorest performer of all assets classes since 2009 which marked the recovery from the Lehman crisis.

This lackluster performance was first attributed to the persistent steep curve (contango) which penalizes the so called “commodities’ passive investors” rolling over long positions in baskets of commodities futures contracts.

Now, the poor performance is due to [...]

Commodities dismal performance conveys global deflation pressure

Posted on 02. Apr, 2013 by Jean Jacques Ohana in Weekly Focus

Despite supportive liquidity and global monetary easing from Central Banks, commodities have been unable to perform since 2011. Commodities had the worst returns among every asset class over the past 250 days. Commodities, currencies and basic resources equities sectors have been under pressure, as illustrated by figure 2.

The poor performance of cyclical markets such as [...]

Why Quantitative Easing alone won’t make commodities rise

Posted on 10. Dec, 2012 by Jean Jacques Ohana in Weekly Focus

The performance of risky assets since 2011 has been highly contrasted (figure 1). The Iboxx High Yield provided by far the highest risk-adjusted return. Whereas equities and precious metals have ended close to neutrality over the last two years, there has been a rift between the positive total return performance of Agriculture and Oil on [...]

Strengths and weaknesses of the financial system

Posted on 05. Nov, 2012 by Jean Jacques Ohana in Weekly Focus

Two major political events are looming and with no doubt will shape financial markets outlook until the end of the year:

The US presidential election will be held on 6th November. According to statistician Nate Silver and Obama’s contract on Intrade, Obama has a clear advantage in the battleground states which should lead him to victory. [...]

What could wake up the stalling gold?

Posted on 22. Oct, 2012 by Jean Jacques Ohana in Weekly Focus

Given the coordinated quantitative easing undertaken by Central Banks, the sharp correction of gold vs. all paper currencies is surprising to say the least. The gold is worth less than it was just before the Federal Reserve announced an open ended QE III, whereas the decision undoubtedly surprised market participants.

The gold rise has stalled so [...]

Time to convert the Central Banks’ blank checks into gold?

Posted on 27. Aug, 2012 by Jean Jacques Ohana in Weekly Focus

Following the release of the bad PMI numbers in China and the political gridlock in the Eurozone, financial markets have arrived at a critical juncture: either deflation or a new central-bank-engineered asset price rally.

The sudden surge of some key components of the precious metals constellation (represented in Figure 1), waking up from a long depression [...]

How long can the “risk-on” “risk-off” schizophrenia last?

Posted on 24. Jul, 2012 by Jean Jacques Ohana in Weekly Focus

The high level of financial integration shown in Figure 1 masks an increasing rift across risky assets. This rift is well-reflected in Figure 2, representing the divergent dynamics of the IBEX and banks, on the one hand, and the DAX and Food and Beverage sector, on the other hand, since 2010. It is also [...]

Watch out! The risk-off portfolio is waking up…

Posted on 28. May, 2012 by Steve Ohana in Weekly Focus

05/28/2012

If you want a confirmation that we have entered into dangerous waters, simply take a look at Riskelia’s risk-off portfolio.

This portfolio is composed of all the most rewarding risk-off bets (long safe haven bonds, short carry trades/equities/commodities positions), i.e. those that display strong positive momentums without bubble. When the risk-off signals are off, this means [...]

Is it time to bury the trends?

Posted on 12. Apr, 2012 by Riskelia in Weekly Focus

The main take-away from the start of the year is that very few assets experienced a sustained trend. Only 33% among the 125 assets scanned by our Radar have been winning bets, a poor performance which characterizes a very rangy environment deprived of significant macro themes. However, the quarterly performance from the successful bets largely [...]