Navigator: The Ratcliffe Memorandum.
A “spectacular” Russian attack in Europe is possible in the next 6-12 weeks. Whether it happens depends on how seriously Putin takes the Ratcliffe warning. This is a moment to be cautious about the Euro and European assets. But stay long EU defence stocks.
Whichever road you take on crude supply, all estimates point to continued supply deficits and inventory drawdowns. Distillate prices, petrol and diesel, kept rising throughout the current US-inspired euphoria about the Middle East and crude supply.
The Wealth Protection Portfolio (WPP) stays long Brent, EU Gas, diesel and petrol. On gas, the latest Bruegel data show European inventories still below winter needs. LNG imports, the only way to plug the gap, are also too low and must rise. That meand LNG prices have to rise more too in order to wrest US LNG away from Asia. The WPP is long EU Gas and LNG is being added this week. The WPP appears at the end the report.
Grains, another chokehold safe haven asset, are also performing thanks to Black Sea disruption, fertiliser and farm fuel prices, and the threat of El Nino. If anything, I would add more wheat and corn. Warsh surprised positively at Jackson Hole. At the very least, he makes interestrate cuts very unlikely.