3 Aug 2021

Oil becalmed

Open interest in oil futures is dropping rapidly. Basically, all markets, from gold to oil to USTs are settling on an disinflationary thesis.

I can’t help thinking that this will spill over in emerging markets debt, i.e. that we’ll soon see the end of 7% yields in Brazil, but it hasn’t happened yet. South Africa seems a basket case. It’s hard to imagine that it’s bond market and currency can both survive in tact for much longer.

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GPIF, THE WORLD’S BIGGEST PENSION FUND SLASHED ITS U.S GOVERNMENT BONDS AND BILLS HOLDINGS TO 35% FROM 47% IN THE PAST 12 MONTHS -BBG