MyStratWeekly – February 21th 2023

Topic of the week: Food: the sword of Damocles

• The surge in food prices seems behind us but the balance remains fragile;
• Uncertainty remains high on the outlook: climatic conditions, natural gas prices, policy of food protectionism, etc.;
• However, it is China's food security policy that poses the main threat to global food security;
• The lack of global coordination on a common food security policy risks increasing price volatility.

Market review: Central banks in doubt

• Signs of slower disinflation sparks terminal rate debate;
• T-note yields near 3.90%;
• Credit spreads stable despite less supportive primary markets;
• European stocks resist higher yields.

Stéphane Déo's podcast

• Any comment on the results season?

Chart of the week

Strategic oil reserves in the United States continue to decline very rapidly. We have been at a rate of almost 20 million barrels per month for the past six months. This helps maintain supply in the market and therefore exert a price pressure.

Not only should this offer stop since reserves have been almost halved since early 2020. But in addition it will be necessary one day to replenish these reserves, and therefore the American State will become a net buyer.

At this point, downward pressure on prices will reverse. Part of the drop in prices is therefore purely artificial and temporary.