The Brazilian real's break through multi-month resistance at BRL1.7400/US$ is a massive technical signal and reinforces our view that the authorities are struggling to contain appreciatory pressures as foreign capital continues to flood the economy.

9/2/2010 8:00:00 PM

Afghanistan faces a new threat to stability as a result of the crisis affecting Kabulbank, its top retail bank. Kabulbank has seen a surge in withdrawals in recent days, triggered by the forced resignations of top officials as new rules took effect forbidding shareholders from holding senior management posts. Former chairman Sherkhan Farnood and former CEO Khalilullah Fruzi, each with a 28% stake in the lender, were reportedly locked in a power struggle in the bank, and Da Afghanistan Bank (DAB, central bank) acted to root out corruption.

9/2/2010 8:00:00 PM

The short-term outlook for wheat prices has turned more bullish following a statement by Vladimir Putin, that Russia could extend its current ban on grain exports until late 2011. At present, the ban is set to expire on December 31 2010. We have highlighted that wheat prices would be sensitive to export policy in the short term and this appears to be playing out. Putin's statement has buoyed

9/2/2010 8:00:00 PM

Brent Crude is trading in a sideways fashion, and we expect a continuation of this in coming months. But we believe that the risks are to the downside as the market remains oversupplied and global economic activity is set to slow in the coming months. We highlight the

9/2/2010 8:00:00 PM

Core View: Although we have been more bullish than consensus for several months, the dramatic rally in front-month prices surpassed even our expectations. As a result, we note significant upside risks to our forecast for an average price of USc520/bushel in 2010. The sharp rally in prices was catalysed by a marked deterioration in production prospects for the 2010/11 season.

9/1/2010 8:00:00 PM

Precious metals have remained bid in an environment of slight aversion, and we expect prices to remain well supported going forward as demand for safe haven assets grows. Indeed, while we may see a temporary bounce in equity markets, we believe that falling yields in fixed income markets are signalling a difficult recovery ahead for the global economy which implies that risk appetite will remain fragile in coming months. We highlight

9/1/2010 8:00:00 PM

BMI View: The macroeconomic recovery taking place throughout the Middle East and North Africa (MENA) fails to inspire us, highlighted in the region's average sovereign risk rating remaining effectively unchanged on last quarter. While vast oil wealth and relatively benign levels of government debt will ensure that a sovereign credit event remains out of the picture for the foreseeable future, ongoing uncertainty surrounding levels of debt held by the private sector and banks' exposure to faltering real estate sectors will keep risk aversion and borrowing rates elevated over the coming quarters.

9/1/2010 8:00:00 PM

Three-month zinc remains in a broad downtrend and we expect additional weakness going forward. From a technical perspective zinc prices have been posting 'lower highs' and 'lower lows' since peaking in January evidenced by the channel downtrend. While zinc prices have rallied significantly since hitting a low of US$1,600/tonne in June, to trade at US$2,155/tonne, massive resistance comes in around the US$2,150-2,200/tonne area, which coincides with the 200-day moving average. Failure to break above this area of resistance will likely see zinc trade sideways to lower in coming months. Indeed, only a break and consolidation above the 200-day moving average and a push above the previous high around the US$2,500/tonne level would make us revisit this view.

9/1/2010 8:00:00 PM

The base metal complex has been buoyed in recent trading by a strong PMI number out of China, which suggested that manufacturing grew at the fastest pace for three months in August. However, this positive reading has done little to alter our views regarding the base metal complex and we highlight the

8/31/2010 8:00:00 PM

BMI View: We estimate that Ghanaian cocoa production registered a slight y-o-y improvement in 2009/10, helping the global market move into balance in 2009/10 after three consecutive seasons of deficit. In 2010/11, we forecast production to increase again, which will help loosen the market further and support our core view of moderating cocoa prices in H210. We expect Ghanaian production to continue growing over the long term, although this growth will be constrained by government price controls. There is a long term risk that the removal domestic price controls, combined with government investment, could eventually see Ghana overtake Ivory Coast

8/31/2010 8:00:00 PM

Since the People's Bank of China announced it would allow greater yuan flexibility back in June, allowing more two-way trade, we have seen just that. The CNY/US$ rate strengthened from CNY6.8300/US$ to CNY6.7683/US$ on the news, and in line with our view has since retreated back to CNY6.8000/US$. We continue to see a move back to our end-year target of CNY6.8300/US$ over the coming months. The 12-month non-deliverable forward is pricing in mild gains over the next year - appreciatory expectations that we see being gradually unwound.

8/25/2010 8:00:00 PM

BMI View: We expect the reduction of Pakistan's 2010/2011 cotton crop on the back of widespread floods to further squeeze the already tight global cotton market. Pakistan begins its cotton harvest year in August and these developments could present more upside pressure on global cotton prices. Growing demand from China, the world's largest importer of cotton, and a rebound in global mill use should also serve to support prices.

8/23/2010 8:00:00 PM

After last week's strong closes, the Mexican IPC and Brazilian Bovespa equity indices have started the week on the back foot, reinforcing our view that a major correction could be drawing close for both markets.

8/30/2010 8:00:00 PM

Commodity markets seem to have stabilized around key areas of support, after a confluence of poor data from the US was offset somewhat by positive a IFO reading from Germany. This ties into our view that markets will continue to be buffeted by conflicting dynamics and as such, we see sideways trading ahead - although we hold a bearish bias. Front-month (October) Brent Crude has bounced this morning to trade just above resistance (previously trendline support) at US$74.33/bbl. A weekly close around current levels would be suggestive of continued gains over the very short-term, particularly given that momentum indicators such

8/25/2010 8:00:00 PM

Our global macro strategy calling for a substantial downturn in Chinese and US demand growth in H210 continues to pay dividends for our 'key market views'. Long-held concerns that protracted asset price deflation and a potential double dip in the US labour market continue to lend to our bias favouring falling interest rate expectations and risk aversion. Our call for a bullish flattening of the US 2s10s treasury spread has further moved decisively in our favour, compressing by another 13bps to fall to 198bps over the week of August 23-27, hitting our 200bps target in the process. With leading indicator

8/26/2010 8:00:00 PM