USTs and Bunds gapped up (with 10ys near their one year highs) without the sign of equity weakness, nor Eurozone periphery hikes which seems to indicate that the markets starts to price some growth where the risk free assets don`t provide enough return and start chasing yields. The Chinese equities outperformed which is a new phenomena lately and after a long period of pressure they might catch a breath.
“Due in large part to rapid urbanization, China is now the world’s top consumer of cement, metal ores, and biomass, among other materials.”
And energy is also on the rise. The whole trend makes the commodity markets more vulnerable because a fortuitous decline in the Chinese growth will hurt them the most. Also the Chinese will have to raise their presence all around the world if they want to prevent supply shocks from shaky areas – and it`s a huge geopolitical topic.
“opted for profit-sharing contracts to … help reverse an eight-year crude production decline”. That is what happens when there is no competition and the industry can`t adapt to the changing situation simply because it`s owned by one huge mammoth. The sentence “I`m from the government and I`m here to help.” is still terrifying.