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from Global Markets Forum Dashboard:

More volatility expected as Fed rate rise looms – Cumberland Advisors’ David Kotok

A healthy dose of fear has re-entered financial markets in the final three months of the year. The Chicago Board Options Exchange VIX, a widely tracked measure of market volatility, rose to a two-month high on Wednesday.

David Kotok, Cumberland Advisors

David Kotok, Cumberland Advisors

Varying news reports offered threats from the Ebola virus and a stagnating European economy as tangential reasons. Perhaps another point is many investors view the U.S. Federal Reserve’s pending decision to raise interest rates as a rumbling train far off in the distance that they now hear headed their way. Closer to the horizon are headlines that can no longer lean on “Fed easing” to explain away rising asset prices and a rising stock market.

“We are in a new period of volatility and it's been developing for the last two or three months,” David Kotok, chairman and chief investment officer of investment advisory firm Cumberland Advisors told the Global Markets Forum on Wednesday. “When you suppress all interest rates to zero you dampen volatility and you distort asset pricing. Now the outlook for interest rates is changing so we are restoring volatility.”

The changes, he said, are evident in a rising U.S. dollar, falling commodity prices and the spread between the high yield and U.S. bond markets.

from Breakingviews:

Commodity bear market looks entrenched

By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The commodities bear market looks entrenched. Strong supply-side responses, or successful economic stimulus by the European Central Bank, would be required to reverse price falls. Neither looks terribly likely.

from Breakingviews:

World should steel for peak China demand

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Markets should steel for peak China demand. Consumption of the metal in the People’s Republic fell for the first time this century in August, an industry official said on Sept. 25. If the decline proves anything more than temporary, it could throw global markets off kilter.

from Breakingviews:

Double-digit oil promises lubrication not seizure

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Double-digit oil is a welcome sign, not a harbinger of deflationary doom. The decline of the price of a barrel of Brent crude to just below $100, down 13 percent from its June peak, is good disinflation. It will help consumer spending and global economic recovery.

from Breakingviews:

Gold’s geopolitical ledge won’t hold up

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Ukrainian crisis and Middle Eastern conflict have provided a respite for the price of gold. After going over a cliff and dropping from heights of $1,700 an ounce during 2013, it has found a ledge at around $1,300. The ledge is eroding.

from Breakingviews:

BHP spin-off won’t appeal to commodity players

By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

BHP Billiton plans to spin off unwanted parts of its business into a new company. Aluminium and nickel, whose prices are rising, are among assets which will be parked in the yet-to-be-named organisation. A potentially more focused and nimble mining company might sound like an ideal vehicle for investors who want to follow a rising market. Not so fast.

from Breakingviews:

Triple financial mystery remains unsolved

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The world of finance is ensnared in a triple mystery: falling bond yields, falling inflation and rising debt. The ignorance is dangerous.

from Breakingviews:

China’s vanishing metals corrode confidence

By John Foley 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Faith in metal-backed lending in China is corroding – and so is confidence in the country’s giant credit system. Authorities and banks including Standard Chartered and CITIC are investigating whether traders at Qingdao port used the same lot of copper and aluminium to back multiple loans. Vanishing collateral isn’t a new problem, but could prove to be China’s weakest link.

from Breakingviews:

Review: China gives Africa handy investment lesson

By Stephanie Rogan

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

In the last decade nearly a million Chinese citizens have taken up residence in Africa. In his vivid new book, “China’s Second Continent,” Howard French tells stories of these migrants and the Africans whose lives they affect. The book weaves anecdotes and interviews with historical and geopolitical background to tell a larger tale of the PRC’s economic engagement in the continent. The result is an unflattering portrait of China’s involvement.

from MacroScope:

El Niño may not give Brazil much to worry about on food prices

File photo of loaded soybean truck for BRAZIL SOY.

Now that Brazilian food prices are finally settling down, it looks like El Niño will strike back in a couple of months to throw the world's weather into disarray.

Bad news for Brazil's Finance Minister, Guido Mantega?

Not necessarily.

It could just as easily be a blessing, economists say. The changes in climate patterns caused by warmer Pacific waters could actually be a boon for Brazilian soy and corn producers while not necessarily disrupting other crops.

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