Commodity markets are constantly changing as the extraction industries try to deal with rapid changes in consumer behaviour and tastes and navigate political upheaval and regulatory challenges in the developed and emerging world.
Climate change and environmental issues have climbed high up the agenda, as global temperatures rise causing investors to rethink their commodity exposures and reallocate capital to other sectors that look greener. The situation is complicated though as a shift towards renewables and electric vehicles creates winners and losers in the energy and metals and mining sector and environmental threats are redistributed rather than eliminated.
Good advice from people who know the industry well is vital. After 25 years of covering commodity markets including crude oil, precious metals and base metals, we have unique insight into the sector and can advise on industry trends, risks and opportunities. We can present to your senior executives in person or delivery a consultancy report tailored to your requirements.
A constant challenge for companies with exposure to commodity markets is dealing with price volatility. Technical analysis is often used for understanding short-term trends and signals, but its value diminishes when looking beyond daily charts. Fundamental analysis helps to set prices over the long-term, but measures of key relationships such as cost curves are backward looking and change on a daily basis depending on exchange rates and raw material costs.
Our solution is to give clients a 1-week to 1-month price signal based on momentum. We backtest over 40 leading technical analysis methods to identify the best performer in history and verify the track record of each method as a forecasting tool over the past 20 years. We combine this momentum signal with seasonality, open interest and our own leading indicators, such as credit conditions and financial market liquidity to create a reliable and robust way of separating out signal from noise. We replicate the approach of CTAs, hedge funds and algorithmic funds to highlight when markets are overbought or oversold and turning points are being reached.
We have 25 years of experience dealing with databases, large spreadsheets and a range of Big Data issues in the commodity markets.
We can help with extracting and verifying fundamental data from news services such as Bloomberg, Haver Analytics and Reuters Eikon. We also have access to numerous alternative data sets and can guide you on the best approach for incorporating these into models and forecasts.
We can create chart packs and market tracking tools that refresh at the click of a button, giving immediate insight into commodity market trends and financial market drivers.