After the big sell-off in gold and commodities generally, it is time to evaluate the state of the biggest global-macro driven markets. There is clearly a shift in thinking sweeping over these markets this week.
Let’s look into the following consensus global-macro forecasts for FX, Energy, Base Metals, and Precious Metals.
From consensus outlooks on these four groups --all partly driven by global GDP growth-- we can get a sense of what’s brewing inside global GDP growth too.
Each prediction typed in below is drawn up in terms of a 12 to 15 month future outlook.
FX - In terms of the U.S. dollar (USD), 2013-14 FX consensus outlooks show us a rich set of stories.
USD weaker against strong Asia-Pacific countries: India, China.
USD strength coming against overvalued commodity currencies: Australia, Brazil, and Russia.
A move back to USD/CAD parity seen with Canada.
Volatility in Euroland. Fresh lows for UK pound. Central bank intervention in Switzerland.
Weak Japan Yen - Abenomics -- it may be overdone for now.
Energy - Prices to be seen in June 2014.
WTI Crude: $95 a barrel
Gasoline at the Pump: $3.82 a gallon
Natural Gas: $3.95 per MMBtu, up +18% y/y
Base Metals - The consensus sees the following patterns playing out to the end of June 2014.
Copper prices falling (-2.43% CAGR from spot), from $8,076 per metric ton to $7,831.
Tin prices down (-4.06%)
Lead prices down (-2.81%)
Aluminum prices rising (+4.00%)
Nickel prices rising (+1.26%) .
Precious Metals - This one is a tough sell at this point!
After the big sell-off, consensus forecasts for gold from mid April 2013 to end June 2014 sees a potential +21.76% CAGR from spot, from $1360 to around $1656.
Consensus for silver calls for a market, with +30.40% appreciation potential by the end of June 2014.
Platinum and palladium consensus sees appreciation potential of +14.74% and +14.28%, respectively.
After such a massive sell-off, led by gold, a ripe debate exists on where to find value.
My Real Time Insight question for you today--
(1) What part of the consensus global-macro do you MOST disagree with? Why?
(2) Importantly, what investment comes to mind to exploit global-macro driven markets?