Following the attempted coup in Turkey on 15th July, we examine afresh the pressure points in the Turkish economy, and note three themes investors will be watching with interest.
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.