Jackson Hole Seems to Start and the US Selling off Its Oil
Yesterday was frankly boring in the financial markets. There was no important news, and it was scary to grow further because of the start of the symposium in Jackson Hole. As a result, everyone stayed with their own people. But this is clearly not for long.
Today begins the first of three days of the Jackson Hole Symposium. There is something to talk about: from the pandemic to inflation and the future of monetary policy. What are we waiting for? At the very least, the recognition by the world's leading financiers that inflation in its current form is a problem that needs to be addressed. As a maximum, the announcement of a change in the global vector of monetary policy. But at the same time, one should not exclude the good old mantra that this is a pandemic, everything is somehow incomprehensible, and the economic recovery is unstable and fragile, and this inflation of yours is a temporary phenomenon that can and should be ignored. And if so, the current monetary policy is what the world needs in such conditions. Amen.
The reaction of the markets will depend on which of the scenarios is realized. Judging by the start of this week, everyone is counting on the latter scenario. Well, the more painful it will fall if any other option is implemented.
Our position is still unchanged - risky assets are surprisingly expensive and this should be used.
Speaking of risky assets. The rise in oil this week is another great opportunity to make money, especially in light of the news that the US is about to have one of the largest oil sell-offs from its strategic reserves since 2014. We are talking about the sale of about 20 million barrels. Let us recall the logic of what is happening is more than obvious: a little over a year ago, the United States, like China, was actively buying cheap oil. And now they have the opportunity to sell at $ 70 what they bought at $ 30. Great deal. But for the oil market, this means a one-time surge in supply, and for the price this is not a reason for growth. So we sell oil.
Today begins the first of three days of the Jackson Hole Symposium. There is something to talk about: from the pandemic to inflation and the future of monetary policy. What are we waiting for? At the very least, the recognition by the world's leading financiers that inflation in its current form is a problem that needs to be addressed. As a maximum, the announcement of a change in the global vector of monetary policy. But at the same time, one should not exclude the good old mantra that this is a pandemic, everything is somehow incomprehensible, and the economic recovery is unstable and fragile, and this inflation of yours is a temporary phenomenon that can and should be ignored. And if so, the current monetary policy is what the world needs in such conditions. Amen.
The reaction of the markets will depend on which of the scenarios is realized. Judging by the start of this week, everyone is counting on the latter scenario. Well, the more painful it will fall if any other option is implemented.
Our position is still unchanged - risky assets are surprisingly expensive and this should be used.
Speaking of risky assets. The rise in oil this week is another great opportunity to make money, especially in light of the news that the US is about to have one of the largest oil sell-offs from its strategic reserves since 2014. We are talking about the sale of about 20 million barrels. Let us recall the logic of what is happening is more than obvious: a little over a year ago, the United States, like China, was actively buying cheap oil. And now they have the opportunity to sell at $ 70 what they bought at $ 30. Great deal. But for the oil market, this means a one-time surge in supply, and for the price this is not a reason for growth. So we sell oil.
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