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The Petroyuan Conflict: Accelerating the Erosion of Dollar Dominance
The ongoing Iran conflict has the potential to significantly impact the petrodollar system, which has long underpinned the US dollar’s role in global trade and reserves. As oil is increasingly traded outside of the US dollar, Middle Eastern flows are shifting towards Asia, and alternative payment systems emerge, the foundations of the petrodollar system were…
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Understanding the Inflationary Impact of Rising Energy Prices on Economic Growth
As we enter March, the inflationary impact of higher energy prices is becoming a growing concern for central banks around the world. The European Central Bank (ECB) and the Bank of England (BoE) have been particularly focused on this issue, as they continue to monitor the impact of rising energy costs on economic growth. Across…
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Europe and UK Flash PMIs: Early Signs of Growth Deterioration Amid Energy Shock
The latest flash PMIs for Europe and the UK have provided early insights into the impact of the ongoing energy shock on economic growth. While the headline indices were slightly below expectations, the data reveals a more concerning picture beneath the surface. Input prices across regions and sectors have seen a sharp increase, while expectations…
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Heightened Volatility and Correlations Suggest Cross-Asset Contagion Risks
As we’ve seen in recent weeks, volatility has been on the rise across various asset classes. This week in particular has seen a resurgence of Iran-related volatility on both the downside and upside. While rates have been leading the cross-asset move on a volatility-normalized basis, implied volatilities for rates are still relatively low compared to…
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Precious Metals Ease On USD And Oil Rebound: Market Insights and Trends
The precious metals complex has witnessed a slight easing in recent days, as the US dollar and oil prices have rebounded. This development has led to some profit-taking in the gold market, with short covering and dip buying supporting the metal’s recent gains. Meanwhile, platinum has seen increased interest due to its implied yields soaring…
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Europe’s Energy Efficiency Gains: A Comprehensive Review
Europe has made significant strides in improving its energy efficiency, despite growing at a slower rate than the US. According to a recent report by the International Energy Agency (IEA), Europe has achieved larger gains in energy efficiency than any other region in the world. This blog post will delve into the reasons behind this…
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The Decline of Oil Intensity in the Global Economy: A Shift towards a More Efficient Future?
The global economy has undergone significant changes since the 1970s, particularly when it comes to oil consumption and its impact on GDP. According to recent data, oil intensity in the US, China, and the EU has declined significantly over the past several decades. In this blog post, we will explore the reasons behind this decline…
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Turkey’s Gold Reserve: A Potential Safeguard Against Lira Volatility?
As tensions between Turkey and Iran continue to escalate, the Turkish central bank is exploring the possibility of using its substantial gold reserves to stabilize the country’s currency, the lira. According to Bloomberg sources, the bank is considering gold-for-foreign-currency swap operations in the London market, which could help reduce the lira’s vulnerability to volatility. With…
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Central Banks and Oil Prices: A Complex Relationship Unpacked
Central banks and oil prices have a complex relationship that can impact economic growth, inflation, and monetary policy. Recent events in the global energy market have highlighted this connection, and in this blog post, we will delve into the factors at play. On one hand, central banks such as the US Federal Reserve (Fed) have…
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The Shift in Gold’s Regime: A New Era of Uncertainty
Gold’s recent price action has challenged the long-held narrative of a one-way, crisis-proof asset. The steep trendline and 50-day resistance have been broken, with the 200-day convergence zone now in sight. This shift in regime is not just a pullback but a fundamental change in behavior, making it crucial to reassess our expectations of gold’s…
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