Marc Oswald

Marc Ostwald

Global Strategist & Chief Economist (FX, Rates & EM, Asset Allocation)

As our Global Strategist & Chief Economist, Marc spends his time analysing and forecasting the impact of macro / microeconomic trends and examining (and where necessary challenging) market psychology. The processes of globalization, the ensuing credit crisis and the changed dynamics of global growth have served to accelerate a process of researching and investigating new and developing markets and economies.

The resultant recognition of global interconnectivity and dependencies of the financial and non-financial economies has dictated and facilitated the expansion of his analytical coverage from a G7 perspective to encompass most of the developed and developing economies across the globe, adopting at all times a lateral and critical thinking perspective on financial market trends.

Beyond the more traditional analyses of currency and interest rate markets across the globe, Marc also spends much time focussing on the fluid and often fickle nature of financial market views of economic developments (having originally studied Psychology), whilst also being a keen student of the distortions afforded to markets by positional risk, “de nouveau” capital adequacy and regulatory requirements, central bank policies, reserve manager asset allocations and pension fund regulations.

Having spent much of his childhood in Libya and Iran, Marc also has a particular interest in Middle Eastern culture, current affairs and history. Marc is a regular guest on CNBC, Bloomberg TV/Radio, BBC, BNN and widely quoted on newswires, newspapers and other digital media. (Previously, Marc set up and managed the Frankfurt office of pioneering online market analysis provider MMS, before moving to the London MMS office to work in product development and training).


Telephone: +44 20 7716 8534
Email: marc.ostwald@admisi.com


Commentary

The Long & the Short of it and The Bigger Picture

25/02/20: Sugar Market Morning Report

The market plunged nearly 40 points yesterday as the Coronavirus continued to impact on the financial markets across the world. The market had opened 3 points weaker (and at what turned out to be the high of the day) but immediately dropped lower as a wave of selling took prices down another 14 points over the next 30 minutes. The market continued to lose ground as more long liquidation appeared with the market bottoming out early afternoon. Values did improve a little on some light day trader short covering but dropped again on the close to register the lows of the day as more long liquidation noted. The market settled some 56 points off the multi-year highs seen a couple of weeks earlier. The HK improved 7 points to settle at +54 as position rolling continued in front of Friday’s expiry. The OI is falling steadily and was down 16,673 lots at 70,196 as of Friday. Another 31k lots traded in H-20 yesterday which should ensure the OI is currently around 55k lots. The KN dropped 7 points ending at +13 probably on the weakness of the flat price. In London the KQ slipped a little to end at +8.10 while the QV was also weaker at +6.60. Yesterday’s action was all about the macro with global stock markets sharply lower and gold and US dollar higher as the Coronavirus took hold in Italy, South Korea and several Middle East countries. Fears are now that a global pandemic will occur and this will have significant impact on global growth. However, concerns about a growing production deficit for the current season continues to underpin the market ensuring the sell-off was contained.

India has reallocated more than 600k tonnes of unused export quota the government has announced. The quota has been shared among the mills who were top exporters. Many sugar mills, especially from Maharashtra, have failed to meet export quotas following poor weather hit cane production.

As of the end of last week the Thai harvest remain on course to be considerably lower than last year’s record production. The Cane crush is running some 20.5% lower than the same time last year at 72.19 million tonnes. Raw sugar production is running some 23% behind last year total at 5.88 million tonnes while white sugar production is 8.75% lower at 1.8 million tonnes. In a research note Finch Solutions said they see total Thai sugar production some 27% lower at 9.8 million tonnes this season. They went on to say they see sugar production taking several years to recover as farmers replant cane lost due to drought.

This morning the market opened 7 points firmer before swiftly gaining another 10 points before hitting some resistance at the 10 day ma (14.90). Prices are currently holding just below this level. The HK and KN are both a point firmer at +55 and +14 respectively. In London the KQ and QV are virtually unchanged at +8.20 and +6.70 respectively. This puts the KK WP at 90.00 and the QN WP at 85.00. The main reason for the early improvement is the macro is a little more positive with most stock markets higher and the US dollar a little off its highs. Crude is around unchanged. The BRL is closed for Carnival. Eyes will remain fixed on the macro for the time being and further weakness cannot  be ruled out. Nevertheless, the fundamental picture remains positive so a large sell-off would seem unlikely. The last COT showed the non-commercials (managed money funds) are still not fully engaged with sugar having only increased their net long position by just under 6.5k lots to just over 98k lots. With multi-year highs hit recently trader had been expecting more fund buying to appear. Most of the action has been by the commercials with producer selling being absorbed by end-user buying. Neither are likely to need to cut positions. Technical support seen at 14.70 (mid BB) then 14.50 (double bottom) then 14.18 (lower BB). Resistance seen at 14.90 (10 day ma) then 15.22 (upper BB) the 15.29 (recent high) then 15.49 (high in November 2017 and double top on 1st month cont.).


Contact the ADMISI Sugar Desk team:

Howard Jenkins, Charles Branch, Kevin Watkins, Steven Trigg

Phone: +44(0) 207 716 8598

Email: admisi.sugar@admisi.com

Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value, investors should therefore be aware that they may not realise the initial amount invested, and indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.

Week Ahead: Data & Events

25/02/20: Sugar Market Morning Report

The market plunged nearly 40 points yesterday as the Coronavirus continued to impact on the financial markets across the world. The market had opened 3 points weaker (and at what turned out to be the high of the day) but immediately dropped lower as a wave of selling took prices down another 14 points over the next 30 minutes. The market continued to lose ground as more long liquidation appeared with the market bottoming out early afternoon. Values did improve a little on some light day trader short covering but dropped again on the close to register the lows of the day as more long liquidation noted. The market settled some 56 points off the multi-year highs seen a couple of weeks earlier. The HK improved 7 points to settle at +54 as position rolling continued in front of Friday’s expiry. The OI is falling steadily and was down 16,673 lots at 70,196 as of Friday. Another 31k lots traded in H-20 yesterday which should ensure the OI is currently around 55k lots. The KN dropped 7 points ending at +13 probably on the weakness of the flat price. In London the KQ slipped a little to end at +8.10 while the QV was also weaker at +6.60. Yesterday’s action was all about the macro with global stock markets sharply lower and gold and US dollar higher as the Coronavirus took hold in Italy, South Korea and several Middle East countries. Fears are now that a global pandemic will occur and this will have significant impact on global growth. However, concerns about a growing production deficit for the current season continues to underpin the market ensuring the sell-off was contained.

India has reallocated more than 600k tonnes of unused export quota the government has announced. The quota has been shared among the mills who were top exporters. Many sugar mills, especially from Maharashtra, have failed to meet export quotas following poor weather hit cane production.

As of the end of last week the Thai harvest remain on course to be considerably lower than last year’s record production. The Cane crush is running some 20.5% lower than the same time last year at 72.19 million tonnes. Raw sugar production is running some 23% behind last year total at 5.88 million tonnes while white sugar production is 8.75% lower at 1.8 million tonnes. In a research note Finch Solutions said they see total Thai sugar production some 27% lower at 9.8 million tonnes this season. They went on to say they see sugar production taking several years to recover as farmers replant cane lost due to drought.

This morning the market opened 7 points firmer before swiftly gaining another 10 points before hitting some resistance at the 10 day ma (14.90). Prices are currently holding just below this level. The HK and KN are both a point firmer at +55 and +14 respectively. In London the KQ and QV are virtually unchanged at +8.20 and +6.70 respectively. This puts the KK WP at 90.00 and the QN WP at 85.00. The main reason for the early improvement is the macro is a little more positive with most stock markets higher and the US dollar a little off its highs. Crude is around unchanged. The BRL is closed for Carnival. Eyes will remain fixed on the macro for the time being and further weakness cannot  be ruled out. Nevertheless, the fundamental picture remains positive so a large sell-off would seem unlikely. The last COT showed the non-commercials (managed money funds) are still not fully engaged with sugar having only increased their net long position by just under 6.5k lots to just over 98k lots. With multi-year highs hit recently trader had been expecting more fund buying to appear. Most of the action has been by the commercials with producer selling being absorbed by end-user buying. Neither are likely to need to cut positions. Technical support seen at 14.70 (mid BB) then 14.50 (double bottom) then 14.18 (lower BB). Resistance seen at 14.90 (10 day ma) then 15.22 (upper BB) the 15.29 (recent high) then 15.49 (high in November 2017 and double top on 1st month cont.).


Contact the ADMISI Sugar Desk team:

Howard Jenkins, Charles Branch, Kevin Watkins, Steven Trigg

Phone: +44(0) 207 716 8598

Email: admisi.sugar@admisi.com

Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value, investors should therefore be aware that they may not realise the initial amount invested, and indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.

Videos

25/02/20: Sugar Market Morning Report

The market plunged nearly 40 points yesterday as the Coronavirus continued to impact on the financial markets across the world. The market had opened 3 points weaker (and at what turned out to be the high of the day) but immediately dropped lower as a wave of selling took prices down another 14 points over the next 30 minutes. The market continued to lose ground as more long liquidation appeared with the market bottoming out early afternoon. Values did improve a little on some light day trader short covering but dropped again on the close to register the lows of the day as more long liquidation noted. The market settled some 56 points off the multi-year highs seen a couple of weeks earlier. The HK improved 7 points to settle at +54 as position rolling continued in front of Friday’s expiry. The OI is falling steadily and was down 16,673 lots at 70,196 as of Friday. Another 31k lots traded in H-20 yesterday which should ensure the OI is currently around 55k lots. The KN dropped 7 points ending at +13 probably on the weakness of the flat price. In London the KQ slipped a little to end at +8.10 while the QV was also weaker at +6.60. Yesterday’s action was all about the macro with global stock markets sharply lower and gold and US dollar higher as the Coronavirus took hold in Italy, South Korea and several Middle East countries. Fears are now that a global pandemic will occur and this will have significant impact on global growth. However, concerns about a growing production deficit for the current season continues to underpin the market ensuring the sell-off was contained.

India has reallocated more than 600k tonnes of unused export quota the government has announced. The quota has been shared among the mills who were top exporters. Many sugar mills, especially from Maharashtra, have failed to meet export quotas following poor weather hit cane production.

As of the end of last week the Thai harvest remain on course to be considerably lower than last year’s record production. The Cane crush is running some 20.5% lower than the same time last year at 72.19 million tonnes. Raw sugar production is running some 23% behind last year total at 5.88 million tonnes while white sugar production is 8.75% lower at 1.8 million tonnes. In a research note Finch Solutions said they see total Thai sugar production some 27% lower at 9.8 million tonnes this season. They went on to say they see sugar production taking several years to recover as farmers replant cane lost due to drought.

This morning the market opened 7 points firmer before swiftly gaining another 10 points before hitting some resistance at the 10 day ma (14.90). Prices are currently holding just below this level. The HK and KN are both a point firmer at +55 and +14 respectively. In London the KQ and QV are virtually unchanged at +8.20 and +6.70 respectively. This puts the KK WP at 90.00 and the QN WP at 85.00. The main reason for the early improvement is the macro is a little more positive with most stock markets higher and the US dollar a little off its highs. Crude is around unchanged. The BRL is closed for Carnival. Eyes will remain fixed on the macro for the time being and further weakness cannot  be ruled out. Nevertheless, the fundamental picture remains positive so a large sell-off would seem unlikely. The last COT showed the non-commercials (managed money funds) are still not fully engaged with sugar having only increased their net long position by just under 6.5k lots to just over 98k lots. With multi-year highs hit recently trader had been expecting more fund buying to appear. Most of the action has been by the commercials with producer selling being absorbed by end-user buying. Neither are likely to need to cut positions. Technical support seen at 14.70 (mid BB) then 14.50 (double bottom) then 14.18 (lower BB). Resistance seen at 14.90 (10 day ma) then 15.22 (upper BB) the 15.29 (recent high) then 15.49 (high in November 2017 and double top on 1st month cont.).


Contact the ADMISI Sugar Desk team:

Howard Jenkins, Charles Branch, Kevin Watkins, Steven Trigg

Phone: +44(0) 207 716 8598

Email: admisi.sugar@admisi.com

Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value, investors should therefore be aware that they may not realise the initial amount invested, and indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.