Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 27 April 2015 at 10:20 GMT

Daily Shot: What would a Greek 'plan B' entail? Team / Saxo Bank
  • Shanghai Composite up over 1.5% again
  • It has become very expensive to be long volatility via VIX instruments
  • US energy exports rise 40%

By Walter Kurtz

The weekend is over and we are talking about the preparation of “Plan B” for the Greek debt crisis. This after what was reported to be a very contentious Eurogroup meeting last week. 

On Saturday German finance minister Wolfgang Schaeuble seemed to be playing it coy with regard to plans to address a potential Greek default, payments on IMF loans are due on 5/1 (EUR0.2bn), and 5/12 (EUR0.8bn).

We have another strong start to the session for China with the Shanghai Composite up over 1.5% again. The index is pushing toward 4.5k. 

In an interview with MarketWatch, former vice chair of the FED Alice Rivlin said, “I think the most important question for the Fed to be focusing on is financial instability over the next few years.”
Now a look at Global Investable Assets... 

It has become very expensive to be long volatility via VIX instruments, as indicated by the steepness of the front of the curve. 


Now, here is the spot front month roll. 

We are approaching the start date of drawdown season for US oil inventories. This is when refinery maintenance is complete, summer blends begin to sell and driving season starts 5/24.  

 And the US rig count and crude production. 

Here is a look at the WTI curve and how much it has rallied and flattened over the last month. 

There is a lot of production, and storage remains off the charts, the move in oil the last month should shift your attention back to large moves in positioning…

…and seemingly more important (for now?), the USD. 


Elsewhere in US energy, exports have grown 40% from ’13-’14 (in wood pellets). This is largely a function of demand induced by new renewable energy policies in the UK and Europe. 


Food for thought:
How long does it take for the US to change its views on key social issues?


Now looking at the same data relative to pivotal events in the drive for change. 

-- Edited by Oliver Morrison

* Walter Kurtz is an alias
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