HedgeTalk Newsletter: OPEC, Finland and Trump Lead This Week's Headlines

Minneapolis, MN | April 6, 2023 | By: John Trefethen, Director & Co-Founder

Table of Contents:

Market Moving Headlines
Interest Rates
Currencies
Commodities
Concept of the Week: Risk versus Speculation
Quote of the Week

Market Moving Headlines

OPEC announced a surprise cut in oil output which could impact inflation and the Fed’s monetary policy
US job openings fall below 10 million for the first time since May 2021
Finland officially becomes a member of NATO
Former President Trump arraigned in New York court on 34 counts
US manufacturing decline eases in March
Israel raises interest rates by 25bps
Chile economic activity unexpectedly falls by 0.5% year-over-year in February
Mexican business confidence rises to a 15-month high
Lithium carbonate prices plummeted by 55% year-to-date as robust output and low demand raise expectations of a supply surplus in 2023
Gold prices surged to $2,016 an ounce, the highest level since March 2022

Interest Rates

Currencies

chart with numbers and words with a star

Commodities

Concept of the Week: Risk versus Speculation

There are many types of derivatives that are used for taking on risk – that speculate on the movement of interest rates, currency exchange rates, and commodity prices. When hedging, one is not guessing the direction that interest rates, currency exchange rates, and commodity prices will move. Instead, they are mitigating the risk of loss should any of those items move in a direction that negatively impacts the organization. Not hedging a risk is speculation. If an entity decides to not hedge an exposure, that entity is in effect speculating that rates, currencies, or commodities will not move in a direction that will adversely impact their institution.