Mileura Capital: Macro Thoughts, FX and Commodities 10th February 2020
Corona virus fears are everywhere. Equities at ATH’s and macro sensitive commodities such as copper and oil are suffering. As seems to be typical these days the best bearish hedge is a commodity short and hold onto your long equities and bonds.
Between trade wars, tariffs and viruses maybe Trump does get his dream of on-shoring after all. It could be the start of more regional manufacturing - using certain hubs rather than the over-reliance the world has on the Chinese manufacturing base. If this does happen this should be inflationary (temporarily). However, commodity markets are pretty good at eliminating arbitrages so I am sure it will become efficient over time.