The Venezuelan government recently announced a de facto 95% devaluation of the bolivar and in the process pegged it to the value of the government’s newly issued crypto-come-oil-currency This will be an interesting development to follow. Not least because it is the first time a government or central bank has pegged to a cryptocurrency (the …read more
Carry exists across all asset classes as compensation paid to speculators for assuming market risk.
We argue that, as in equities, bonds, and currency, the carry trade in commodities represents a persistent source of beta-like returns.
• The recent uptick of Chinese demand for copper and low levels of warehouse stocks give a misleading picture of the state of the copper market.
• Taking a broader view of stocks, we suggest that there is a substantial amount of “missing copper”, large portions of which are held by the Chinese State reserve Bureau (SRB).
• The policy of the latter in 2016 is therefore key to the performance of copper.