backwardation

COT Black: Futures Curve Twisting

By |2018-07-12T17:34:08+00:00July 12th, 2018|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is an interesting, ongoing academic debate about what shape the crude oil futures curve “should” take. Quite naturally, it seems backwardation is the market baseline. Most people, I think, presume otherwise because of their familiarity with commodities like gold. Backwardation in that market implies a physical shortage. Unlike that precious metal, crude oil is [...]

COT Black: Bad News For Jerome, Swap Dealers Seem Really Convinced

By |2017-12-07T16:37:37+00:00December 7th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

US domestic stocks of crude oil continue to be quite high and now the futures curve is only a few pennies in the front month contract from being fully backwardated again. Contango is gone, which suggests that oil market is in sight of achieving some measure of balance. That anticipated equilibrium, however, is registering at [...]

(Un)Welcome Back ‘Dollar’

By |2016-07-13T13:19:00+00:00July 13th, 2016|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On June 3, the May payroll report was released shocking convention by its “unexpected” weakness. It was, and so far remains, the worst headline number since 2009. Because the suggestion of a far weaker labor market than policymakers have been claiming undermined their whole economic narrative, “markets” immediately reversed course and bid as if there [...]

Reading Curves and Finding Only the Death of Money

By |2016-01-11T18:58:21+00:00January 11th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When analyzing the full and true nature of the dissonance between the idea of continued recovery and the financial markets’ scenario for something much worse you realize that this is not a new occurrence. In curve after curve, negativity has been building for years. Financial curves are important because they tell us the health of [...]

Getting October 15 Right, Even to Crude

By |2015-04-20T11:40:28+00:00April 20th, 2015|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is becoming settled wisdom that the most dangerous aspects of any current financial contours are due almost entirely to some version of HFT or electronic trading. That is undoubtedly true, as far as it might relate to one aspect, but to claim that computers are the single biggest source, let along only source, of [...]