Here we go again
It's a bit like a rollercoaster this, but From the Floor makes no apology for once again homing in on Crude oil. And the analogy only works if we accept that the rises higher are ever smaller and the descents seem to get ever steeper.
For oil, it seems there really is no respite.
"There is potential for Brent crude oil to go to sub-$50/barrel and for WTI crude to hit sub $40/b," says Saxo Bank's head of commodites strategy Ole Hansen. Both benchmarks are facing supply headwinds, albeit from different sources.
The well-documented inexorable rise in US oil inventories needs little further expanding after fresh records unveiled Wednesday with inventories up another 9.6 million barrels and oil storage at WTI delivery hub Cushing starting to brim over after a 69% rise so far in 2015.
Brent's problems are also supply related but owe more to the changing geopolitical flux as an Iran nuclear deal looks to be shaping up and Libya, for the moment, looks like it might re-enter the global oil market in a meaningful way as turmoil recedes in the trouble-torn north African state.
With China also signalling its strategic buy up of cheap oil may be coming to an end as it struggles to build capacity to handle all that stock, Opec's unwavering stance on its own supply levels, the weaker dollar, and European maintenance about to enter full swing, everything it seems is conspiring to keep oil firmly in that thoroughly depressed box from which there seems little prospect of escape.
"Going into May, I might be looking at $49/b on WTI but no higher," says Hansen. "There is limited upside beyond anything like $50/b.
At 0755 GMT WTI crude was at $45.24/b. European benchmark Brent was at $54.11/b.
Gold breach
Gold has seemingly left that the $1,150/oz mark in its trail but now faces a fresh challenge at the $1,179-83/oz zone, and Hansen notes that the linkage between bonds and gold has started to unravel in the last few days.
"This correlation has been in place since December but we're starting to see a divergence," he says. "If gold can challenge that $1,179-83 zone, then we could see a move higher."
Hansen nevertheless adds that he'd look at selling gold at $1,180/oz with a stop at $1,193/oz.
Coffee is another commodity on a bit of an adrenaline rush this week as it emerges as the biggest mover across the commodities spectrum. "It took out 142.20 yesterday, but any move higher needs support from the Brazilian real," says Hansen.
"The Real has weakened against the dollar which could act as a brake on any move higher."
Kick it
From the Floor always likes to keep an eye on sharp equity movements and (NYSE:NKE) seems to be on a bit of a run, up 4% after it posted a "solid set of results," says Saxo Bank's head of macro strategy Mads Koefoed.
Nike's Q4 was up 17% year-on-year, but the figure was more impressive set against the backdrop of a forex hit that "shaved 6% off the result," says Koefoed, a weaker performance in Europe and declining activity in Asia.
"Sales of key brand Converse was up an impressive 33% on year and the tie-in with Footlocker is also doing well," says Koefoed.
In markets, the Shanghai Composite Index hit a fresh record, posting its highest intraday result since May 2008.
Bunds records
Bunds would like a bit of that no doubt, but they recorded low yields of minus 0.17%, says the fixed income desk's Michael Boye. Elsewhere, U.S. Treasuriesr rallied to the 2% level, he says.
"Greece is once again emerging as an issue," he says, "after the biggest run on the Greek banks since Feburary 20, yesterday."
"None of this is an issue for now as long as the bail out is in place," says Boye. "It depends whether you think Greece is still part of the Eurozone on three years' time."
Election time
Finally, vols were sold off during the Asian session, but a potentially exciting "front-end cable vols move is coming into play" in the run up to the UK elections, says the FX option desk's Krestan Bechmann.
"Front-end Cable will be sold off pre-Easter," he says, "but after, they will get more and more bid."
"If you think the dollar turmoil is going to continue, then buying front-end cable could be the way forward."