mintdotfinance

mintdotfinance

Markets are notorious for exaggerated expectations. They sense a tiger when all they see is a cat. Expectations on rate cuts have been no different. Despite the Fed’s speak on measured changes to policy rates, markets got ahead of themselves since late last year. Markets are now starting to align their expectations with reality. US economic data from January...

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Bitcoin is known as digital gold. It is treasured as an investment asset. Much like the famous yellow metal, bitcoin (“BTC”) does not offer income through dividends or interest. This poses a challenge for investors seeking regular cashflows and income. One strategy that skilled investors use to turn BTC into an income generating asset is the cash and carry trade...

mintdotfinance

Gold is the favoured precious metal. Its demand reflects consumer consumption of jewellery, investment demand, and monetary policy conditions. In a previous paper , Mint Finance highlighted these factors in detail. Platinum is also a precious metal, used to create jewellery and to a small extent as a form of investment. Crucially, unlike gold (6% industrial...

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Crude Oil price have remained sharply range bound for the last two months. CME Group’s West Texas Intermediate (WTI) futures have traded between USD 70-80 a barrel since early November last year. Sharply shifting supply and demand outlook explains range bound trading in crude oil. In this paper, we discuss diverging factors affecting crude oil price and...

mintdotfinance

The Japanese Yen is one of the worst performing currencies in 2024. It has weakened 5.4% against the USD. Forces have been stacked against Yen ever since the US Federal Reserve started raising interest rates at a record pace. In sharp contrast, ultra loose monetary stance from the Bank of Japan (BoJ) resulted in wide policy rate differential of 5% between...

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Gold prices in 2023 defied expectations. In 2023, economic uncertainty was in plenty with rapidly rising inflation. There was market consensus that recession would benefit gold. Gold indeed delivered stellar performance rising 12% through 2023. It was not because of a recession though. Most major economies successfully dodged a recession. Inflation trended...

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Fighting inflation is hard. Hence, central banks are data dependent while calibrating rates. Continuing geopolitical conflicts puts Europe at risk of inflation relapse. Headline numbers can be misleading. Central bankers will dig deep. Deeper analysis will compel investors and policy makers to rethink and recalibrate interest rate calculus. This paper unpacks...

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Consistently harvesting positive gains is difficult. In markets where risks remain rife, that task gets harder. That’s where tactical hedging during periods of elevated risk help improve risk adjusted returns. Analyst forecasts are for US equity performance to be neutral to bullish in 2024. Some believe that returns are likely to be dragged lower given the...

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When traditional markets sense optimism, crypto markets go straight to the moon. Bitcoin (“BTC”) has been on a tear this year supported by hopes of spot BTC ETF launch, rising regulatory clarity, and monetary policy easing. When BTC sentiment turns bullish, it leads to sharp outperformance in digital asset-linked stocks as noted previously. Coinbase is a top...

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Last week was busy for major central banks. During a 60-hour window, rates were set for 60% of the global economy, from the US Fed, the ECB, to the BoE. Central banks’ announcements caused a frenzy in markets. The pivot to a dovish stance by the US Fed contrasted sharply with hawkishness from the ECB. This paper summarizes rate announcements and their market...

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Bitcoin ("BTC") prices are on a tear. It has rallied +57% since the start of September and is on course to clock fourth sequential month of rising prices. Four forces are driving a blistering rally. Euphoria linked to BTC spot ETF. Bullishness in all “Risk On” assets. Regulatory clarity. BTC halving. In a BTC rally, portfolio managers can gain exposure to the...

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Soybean prices have been on a rollercoaster fuelled by turbulence over the last month amid elevated weather concerns, changing production yields, and geopolitical upheavals affecting prices. Winters are vital for bean traders. This paper delves into the various forces at play to guide traders and portfolio managers to navigate through the rough weather....

mintdotfinance Updated 

Rudyard Kipling wrote in his famous poem, “If you can keep your head when others are losing theirs and blaming it on you, then you’ll be a man, my son.” Shocks from OPEC decisions can leave even the experts on the edge of their seats. Short-dated options on crude oil are tailor made to address and manage such idiosyncratic risks helping each trader become a man...

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In Karate, offense is the best form of defence. The BoJ knows it. Japan faces a raft of economic headwinds which shows up in Yen’s performance. The BoJ intervened strongly last year to support the currency when it skirted around current levels. Yen is hovering at those levels again. BoJ is anticipated to act. Such interventions typically mark the bottom. This...

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Ever dreamt of being an oil refiner? Fret not. You can operate a virtual refinery using a combination of energy derivatives that replicates oil refiner returns. Crude oil is the world’s most traded commodity. Oil consumption fuels the global economy. Crude is refined into gasoline and distillates. Refining is the process of cracking crude into its usable...

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Two men adventuring in the wild. They see a tiger racing towards them. They turn and start dashing away. Then, one of them stops to put on shoes. “What are you doing? The beast will outsprint you despite those” says the other. “I don’t have to run faster than the tiger” he retorts. “I just have to outrun you.” FX stories are not dissimilar. Relative strengths and...

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Days of triple digit volatility and rampant amateur speculation are gone. Unlike the overblown enthusiasm which defined the peak of 2021, investors now are more measured and discerning. 2023 has been defined by (a) discrete and information fuelled rallies followed by unprecedented low volatility, and (b) rise of traditional finance entrants in digital assets. ...

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Shining bright and sizzling hot, gold has surged 8% over the past two weeks. Ample supply of geopolitical shocks from violence in the Middle East to ongoing Russia-Ukraine conflict has been driving gold high. This paper examines the drivers supporting the gold rally and prevailing bullish & bearish factors. It posits two hypothetical trades to astutely position...