Away from the headlines about The Panama Papers, global financial markets turmoiled quietly this week with a surge in equity and FX volatility and banks suffering more death blows. However, something happened in Saudi Arabia's banking system that was largely uncovered by anyone in the mainstream... overnight deposit rates exploded to their highest since the financial crisis in 2009...
Two weeks ago we previewed how, in the aftermath of the ECB's stunning announcement the hedge fund masking as a central bank would start buying investment grade corporate debt, it is only a matter of time before the ECB is forced to buy junk bonds too.
Several days ago, following the latest M&A deal to blow up and rock the hedge fund world when the US Treasury ended the Pfizer-Allergan deal, we were wondering with event/arb funds would be most impacted. We now of know at least one, and it's a name that has been hit not only on M&A arbs blowing up, but also on some core hedge fund hotel names such as Allergan getting crushed in the 2016.
Submitted by Arthur Berman via OilPrice.com,
Natural gas prices should double over the next year.
Over-supply plus a warm 2015-2016 winter have resulted in low gas prices. That is about to change because supply is decreasing (Figure 1).
(Click to enlarge)
Figure 1. EIA U.S. natural gas supply balance and forecast. Production, consumption and supply balance values are 12-month moving averages. Source: EIA and Labyrinth Consulting Services, Inc.
The US Oil rig count continues to track lagged oil prices perfectly, falling 8 rigs in the last week to 354 - its lowest since Nov 2009. Oil rigs have now declined 15 of the last 16 weeks. While gas rigs rose by 1 this week, the total rig count slipped 7 to 443 - yet another fresh record low. While the reaction was delayed, crude prices are sliding from their exuberant rally highs.
Oil Rigs dropped to Nov 2009 lows...
As the total US rig count plunged to fresh record lows...