Maleeha Bengali is CEO of MB Commodities Capital, based in London.
Recent Articles By The Author
With the Fed announcing bazooka liquidity measures as selling took a breather, it allowed the market to rally back to the next level of resistance of around 2600. But now what?
We will enter a hyper inflationary world at some point. In that environment bonds and equities will move together in the same direction, and the 60-40 model will not work anymore.
These are not investable markets, yet. Wait it out, the damage is beyond a small fix now.
Demand is collapsing from global lockdowns, just as supply is surging from all the major, battle-ready producers, who refuse to blink first amid the price war.
Dramatically slashing interest rates to zero and promising huge asset purchases are instilling fear, not confidence, in market participants.
Coronavirus is the catalyst that rocked a very delicate boat, which came across an oil tornado's path. Commodities will be the biggest beneficiary of the turnaround, once it comes.
This could be the end of the Kissinger/Nixon petrodollar system, which has been in place since the 1970s.
As bond yields are cratering, signifying deflation, there will be margin calls and de-risking, and the oil price and energy sector will be hit the hardest.