The Officials

Boing!! Markets bounced today as Trump kept his mouth shut for most of it. No more Truth tirades rampaging about 1000% tariffs on everything coming into the US. And guess what! The economy enjoyed the calm: the S&P 500 surged over 4% at its peak and Nasdaq 100 jumped 4.4% but both pared their gains in the afternoon, as the White House said the additional 50% tariffs on China come into effect at midnight EST.

For the week ending 4th April, our momentum table shows all contracts across tenors seeing robust growth in exchange traded volumes amid Trump’s tariffs and OPEC’s voluntary cut unwind from May. RBOB contracts increased the most, especially for the July and August tenors with 190% and 171% growth respectively. Of all contracts in the momentum table, June Brent saw the smallest increase, but still rose by 66.84%.

The selloff finally takes a breather. After a 3-day massacre that had the bloodbath overflowing and flooding the bathroom, markets finally stabilised. From gold to oil via equities, markets are trying to find their feet. Brent steadied to close at $64.11/bbl, while equity markets bounced marginally.

‘If we fight, I might lose a leg but that’s ok because you’ll lose an arm and a leg’. This seems to sum up Trump’s approach to the world economy. But really, everyone’s losing their heads. Markets have been in chaos today, look no further than credit markets, where 10-year treasury yields traded in a wider range than in the entirety of March. Traders are battling against recessionary fears and tariff reproachment, headline by headline. But after all is said and done, China are unlikely to yield. According to our market sources, they expect no reproachment, China have had enough and an additional increase of 50% makes no difference this time. We can’t help but agree. China’s taken steady steps to depend less on exports to the US… But for the Donald, obviously, it’s worth it as your opponent loses more, who cares if your own economy is pounded and pummelled – they lose! Actually, we all lose!

It is Armageddon day! Global collapse and the world are facing an implosion in equity markets, commodities, hedge funds margin calls, name anything if values from houses to currency in your pocket and everybody is wondering what happened to the value of all those things. Even gold got hit, down 0.8%. Copper, the bell weather of the economy got spanked hard, down 5% today. Trump tariffs triggered a global equity market collapse from Japan to Canada and everywhere between. Trillions of dollars evaporated in the rout. We are not to side with Bill Ackman, a controversial hedge fund manager and a fervent Trump anything lover. But even he called for a 90-day tariff pause fearing ‘a nuclear economic winter.’ We think we’re still in the middle of the mushroom and pity those facing margin calls. According to sources across FX, Equity and Rates, “liquidity is poor leading to instances of price over shoots.” Investment grade credit remains fairly orderly but high-yield is becoming extremely volatile.

10 dollars down in 2 days! The power of market pricing in the collapse in global trade. China’s bold retaliation delivered the coup d’grace and the flat price expired. We know it can be temporary if the grown-ups ask questions and say, what are we doing, we are all tied in. In the meantime, 50s is not out of question. The impact on the Gulf economies is severe and all hands should be on deck not to paint rosy demand pictures but to have serious chats with the US and its trading partners.

It is bad, really bad. Wars of any kind including trade wars leave heaps of casualties in their wake. In this case, depleted
consumers, shutdown manufacturers, trucking and shipping companies and chip manufacturers, one of the main US exports to
China. The size of trade is huge and more details in the next section.
But in the meantime, oil got whacked! Down, down, down it goes. We are firmly in the 60s territory. Just as flat price gets
whacked with one bearish headline, another one emerges. Tariffs, OPEC, retaliation. From a $75 handle at the start of April
we’re now down almost $10/bbl! It’s brutal out there folks, recession fears are growing, and China just announced a hefty 34%
reciprocal tariff on all US goods from April 10! No crude, oil product, LNG or any other commodity type will go from the US to
China. China is the world’s biggest seaborne crude importer and flow US-China is now firmly shut! The US trade deficit with
China last year was near $300 billion! Up 5.8% y/y – the US needs China more than the other way around…

The 60s are back! The market didn’t just fall at the open but kept going all the way to under $70! For the first time since 19 March. So, what triggered the price collapse in oil and equities? Oil was let off easily with crude from Canada and Mexico entering tariff free as per normal. So, longs hoping for mayhem exited to the left and tumbled down the stairs. And on equities, they got more punishment than they thought; seeing the upcoming global slowdown they sold off ahead of time. Actually, things are very messy and it has a feel of a bunch of real amateurs running the circus. Trump spilled blood on Wall Street and now he’s back to his aim of cheap oil! With a bit of help from OPEC even…

As The Officials keep saying, along with every respected economist, tariffs are not good for the economy! Today, the world and its people will become poorer, and Tariff Man will eventually understand the people he promised to protect will end up paying the price of his hubris. And the administration published some clearly erroneous tariff numbers as justification. They added the import value and divide by the export value which leads not to tariff rates but crazy numbers. It doesn’t seem a great way to manage major economic policy… For China, for example, the additional 34% rate, equals the US deficit with China of $291.9 billion, divided by total imports from China of $433.8 billion, then divided by 2 again!

It’s coming. Not He but the Tariff Man! At last we’ll know who’s getting hit by what. And how much. Or maybe things will change again immediately after the press conference. To be upfront, we were confused what was actually in place preceding the set of tariffs. So much has been done and immediately undone. Keep an eye on @OnyxOfficials X page as we cover proceedings live.

Today’s the day. At last. America’s ‘Liberation Day’. Forget about 4 July, this is the big one. Unless there have been any last minute calls from desperate leaders hoping to duck extra tariffs. Mr T has taken a pickaxe to global trade to reforge it in his own image. Who knows where he will hit next? And by how much? And on what?

$75 is a tough nut to crack. After last week’s rally, Brent rolled into April and fancied a go at it and the front month (June) contract tiptoed over this morning to peak at $75.27/bbl before falling back to close at $74.93/bbl. The front Brent spread took flight yesterday, closing in on $1.20, but descended again to 82c by today’s European close. So, what happens now? Is this overbought territory? Feels like it, and only those daring and with a strong expectation of boom boom should be long above $75… otherwise, risky!

For the week ending 28 March, our momentum table shows most contracts seeing slight to moderate growth in exchange traded volumes for June and July tenors, except for gasoil contracts which declined by 13% and 20% respectively. For the May tenor, most contracts saw small changes or declines, while May Brent fell steeply by 29.69% and RBOB rose by 9%.

Before we get into the main report, we’d like to share a quick update. The Officials have just completed our third quarter and have hit 2 million views across our social media! If you would like to receive our reports directly, please get in touch and we will arrange to send them to you every day! Or go to our Twitter page @OnyxOfficials.

What a difference the rumblings of war can do. For Brent, March was a month divided in two. In the first sessions, it tumbled to below $69, going all the way down to $68.50/bbl on 5 March. The drop was caused by poor economics as some countries could see a severe contraction in the growth rate. But then the price turned back and built steadily into the low $70s before last week’s rally to $74. The US was beating on the Houthis and the rumours were on that Trump would drop bombs like never seen on the Iranians.