16 to 22 April: No Free Lunch

Last week, the IMF released its updated “World Economic Outlook”. Just as in January, the fund believes global growth will continue at a cyclical peak of 3.9% until 2020 (an acceleration from 3.8% last year). However, the forecast came with a caution that “momentum is not assured”, particularly in light of “waning support for global integration”, and “despite the good near-term news, longer-term prospects are more sobering.” Whilst we think the growth projections are too optimistic, we would agree with the overall sentiment. The cycle is not yet over but the structural issues facing developed countries are starting to rear their heads again, whilst those countries that overly rely on natural resources also face a pressing need to diversify.

With respect to the commodity space, the WTI oil price came close to USD 70 per barrel (69.56) before falling back later in the week. This prompted President Trump to tweet, “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” Following sanctions on Russia, metal prices have also surged over the last 2 weeks, aluminium because Rusal has been banned from selling in a number of countries and palladium and nickel because of worries Norilsk Nickel could be targeted next.

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