Introduction
Has the commodities rally run out of steam?
There’s no escaping the cost of living crisis which is currently playing out in a myriad of ways. Staffing shortages, spiralling food price inflation and soaring energy costs dominate lives and news headlines alike, but are we approaching an inflexion point – or is this just a case of markets pausing for breath? There have certainly been some significant reversions in terms of the underlying prices for many assets which now trade at a fraction of the levels seen a few months ago. But complicating matters further has been that growing trend for governments to limit exports in order to protect domestic consumers, adding an extra set of fundamental considerations on top of the usual supply/demand equation. Regardless of where prices go next, volatility may well remain elevated.
Market insights & trends
The last quarter has seen central bank rate hikes deliver a meaningful impact to markets as policymakers attempt to do their bit when it comes to limiting inflation. Many commentators have suggested this is a rather hollow gesture as price rises are being driven by extraneous factors rather than consumers having spare cash with which to fuel demand, but rates continue go up – at least for now. Clear telegraphing from the Federal Reserve has bolstered the strength of the US Dollar, whilst the ECB’s commitment to raising rates has also helped lend a degree of support to the Euro. It hasn’t all been plain sailing however, with the Swiss National Bank’s unexpected decision to hike rates by 50 basis points propelling volatility in Swiss Franc and serving as a timely reminder that surprises can come from perhaps the least expected corners of the market.
Corporate Update
On the 9th of June, CMC Markets released their final results for the year ending 31st March. Net operating income was reported to be £282 million, at the top end of guidance and 12%
higher than the FY2020 pre-pandemic figure. New investments will focus on seven core
initiatives, aiming to improve functionality, reduce revenue volatility and grow pre-tax profit
margins. CMC’s leveraged B2B offering continues to perform well and expansion of this
division remains a major pillar of growth.
We have welcomed Sam Horowitz to the CMC Markets Connect team, as head of FX Distribution and Liquidity Management. Sam has twenty-five years’ experience of working in the currency markets with high profile institutions including UBS, Rabobank, BBVA and Lloyds Bank, where he held the role of director for eFX Algorithmic Trading.
Kim Ljung Andersen has also joined the team as Head of Institutional Product Solutions. Before joining CMC Markets, Kim spent 18 years at Saxo Bank as a multi asset solutions specialist, focusing both on sales and subsequent integrations. His wealth of industry knowledge will provide significant benefits to both CMC and its institutional counterparties.
Events
In June 2022, the team from CMC Markets Connect attended the iFX Expo in Cyprus. The number of attendees underlined the fact that many people working in the sector and associated industries are clearly delighted to be back to large scale, in-person events after a break of more than two years.
Off the back of the popularity of the Limassol event, we are delighted to advise that we will be a sponsor at iFX in Bangkok, running from September 13th to 15th. If you’re planning on attending, do check out our stand 95 & 96 or drop us an e-mail at institutional@cmcmarkets.com to book a meeting.
Publications
We continue to promote our daily podcast and weekly video covering the market volatility data to a growing audience. If you aren’t already signed up to receive this and would like to be added to the list, please contact Victoria Paling’s email; v.paling@cmcmarkets,com
June 2022 also saw the timely publication of our e-book, looking at why cryptocurrencies haven’t proved to be the inflation hedge that many had expected. Drawing from comments made by a number of industry experts at our Women in Finance event which was held back in March, the e-book is now available. To request a copy please email Victoria Paling at v.paling@cmcmarkets.com or download on the website https://www.cmcmarkets.com/en-gb/connect/international-womens-day
Keeping in touch
This will be our last edition of the CMC Institutional Leader, as we are working on a new format which will be both more frequent and data-centric, providing what we believe will be a more institutional product. We expect to launch this shortly after the summer break.
We also provide regular updates on our dedicated CMC Markets Institutional LinkedIn page. Please feel free to follow us at https://www.linkedin.com/showcase/cmc-markets-connect/ for the most up to date news of all our latest developments.