FT : Chronicle of an oil shock foretold

Chronicle of an oil shock foretold
Crude times

Given how surprisingly hot economic data has been lately, China’s reopening and all the sudden chatter of a “no landing” scenario, you’d expect oil prices to also tick up. But no.

Brent and WTI both kept sagging since the summer of 2022, and have been ambling around the $85-90 and $75-80 range respectively for most of 2023. What’s up?


Basically, unlike many other markets, oil tends to be the annoying Zen philosopher of commodities and only lives in the here and now. And right here and now, the oil market remains well-supplied, notes Goldman Sachs.

Qualitatively, oil is a spot asset and an anticipatory asset. Spot and future tightening shocks should raise oil prices because both increase the payoff from owning oil. Bullish spot shocks boost demand and prices in the spot market, and lower inventories, while bullish future shocks boost demand in the storage market, but raise inventories (as sketched in appendix Exhibit 14).

Quantitatively, oil prices respond more to spot shocks than to future shocks. While distant future tightening shocks increase the value of holding oil, this should be netted against the significant cost of storage. The price effect required to generate a given adjustment to the level of stocks is smaller for future shocks than for spot shocks because the former leave more time for demand and supply adjustments to accumulate.

Oil prices are less responsive to distant future shocks than metals and equities. The convenience yield from holding a commodity is very much like the dividend from holding a company’s stock. However, zero storage costs for equities and relatively sticky dividend yields compared to energy convenience yields imply that equities put more weight on future shocks. Similarly, smaller storage costs as a percent of the commodity price also make metals more anticipatory than energy assets.

Goldman’s senior energy economist Daan Struyven looked at the impact of 150 spot demand shocks (days when there were major surprises in US, Chinese or European economic data); seven spot supply shocks (natural disasters or strikes); 16 future demand shocks (eg Brexit or fiscal stimulus announcements) and 128 future supply shocks (mostly OPEC announcements).

Spot shocks tends to have an immediate impact, while “future shocks” often takes months to filter through to oil prices (but can on the other hand last for years). Supply shocks are particularly powerful.


To a lot of people this will be a bit “well, duh”. But the point Struyven is making is that the improving growth outlook will probably gradually filter through to the spot crude price, which he reckons will hit $100 a barrel (for Brent) by the end of the year.

Le Figaro : Guide Michelin 2023

DIRECT - Guide Michelin 2023: Alexandre Couillon décroche trois étoiles pour La Marine

Après le coup de tonnerre de la rétrogradation de Guy Savoy et Christopher Coutanceau, Bibendum a primé ce lundi, depuis le Palais des congrès et de la musique de Strasbourg, le chef installé à Noirmoutier.

Alexandre Couillon décroche le Graal

Un seul restaurant décroche la troisième étoile cette année: il s'agit de La Marine, d'Alexandre Couillon, à Noirmoutier.

4 restaurants à 2 étoiles

Quatre tables reçoivent leur deuxième macaron :

- Cyril Attrazic à Aumont-Aubrac (48)
- Christophe Dufossé - Château de Beaulieu à Busnes (62)
- L'Amaryllis de Cédric Burtin à Saint-Rémy (71)
- L'Auberge de Montmin de Florian Favario à Talloires-Montmin (74)


44 nouveaux étoilés dont 37 en régions

La cérémonie démarre, devant 1500 invités, avec dix petites minutes de retard, par un film de promotion sur le Guide. La journaliste Anaïs Bouton, qui anime pour la première fois la remise des étoiles, monte sur scène pour lancer cette «cérémonie historique et exceptionnelle», car des chefs triple-étoilés de toute l'Europe sont présents (une vingtaine). Suivent un film de promotion sur la région hôte (qui finance l'événement), l'Alsace, et un discours de Frédéric Bierry, président de le Collectivité européenne d'Alsace.

Gwendal Poullennec monte alors sur scène pour se féliciter des territoires où les chefs puisent leur singularité, qui font de l'Europe la destination la plus gastronomique du monde. Le Guide France 2023 compte 44 nouveaux étoilés dont 37 en régions.

Un message vidéo d'Emmanuel Macron

Un message vidéo d'Emmanuel Macron est ensuite diffusé. Une première! Le Président regrette de ne pas être présent, mais félicite le Bibendum qui consacre l'excellence, ainsi que les chefs primés. Il dit aussi penser à ceux qui sont rétrogradés. Et souligne l'importance de «l'art de vivre à la française» mais aussi de la cuisine santé et de l'agriculture de qualité. Il évoque le soutien de l'Etat à ces professions de la table, de l'agriculture, le Clairefontaine de la gastronomie qui va être lancé, mais aussi la féminisation du métier. «Merci de faire rayonner la France» conclut-il.

Les prix de la sommellerie et la salle

Gaby Benicio, sommelière d'Äponem (Vailhan) et Cyril Kocher, sommelier de Thierry Schwartz (Obernai) reçoivent le prix de la sommellerie des mains de Serge Dubs (l'Auberge de l'Ill).

Le prix du service est lui attribué à Claire Sonnet du Louis XV - Alain Ducasse à Monaco (retiré par le chef monégasque en personne !) et à Frédéric Rouen de L'Alter-Native, à Béziers, par Dominique Loiseau, présidente du groupe Bernard Loiseau.

Sept chefs pâtissiers primés

Sept restaurants rejoignent la promotion Passion Dessert, qui met en avant les chefs pâtissiers d'exception, présentés par Christine Ferber et Christophe Felder: Flocons de Sel (Aurélie Collomb-Clerc) à Megève ; Le Baudelaire (Pierre-Jean Quinonero) à Paris ; Le Jules Verne (Germain Decreton) à Paris ; Les Explorateurs – Hôtel Pashmina (Sébastien Deléglise) à Val Thorens ; Mirazur (Marius Dufay) à Menton ; Rouge (François Josse) à Nîmes et Troisgros – Le Bois sans Feuilles (César Troisgros et Romain Puybareau) à Ouches. 52 restaurants composent désormais la promotion soutenue par la maison Valrhona.

39 tables à 1 étoile

39 restaurants décrochent leur premier macaron. Annoncée en dernier, l'Île-de-France est pourtant la région la plus primée avec 7 tables, devant la Nouvelle-Aquitaine et le Pays de la Loire. Par région:

AUVERGNE –RHÔNE ALPES (4)

- Château d'Origny à Ouches (42)
- Restaurant de la Loire à Pouilly-sous-Charlieu (42)
- La Mutinerie à Lyon (69)
- L'Incomparable à Tresserve (73)


PROVENCE-ALPES-CÔTE D'AZUR (3)

- Château Eza à Èze (06)
- Couleurs de Shimatani à La Ciotat (13)
- Faventia à Tourrettes (83)


PAYS DE LA LOIRE (5)

- Les Cadets à Nantes (44)
- L'Épicurien - Abbaye de Villeneuve aux Sorinières (44)
- Maison Desamy à Mareuil-sur-Lay (85)
- Les Reflets à La Roche-sur-Yon (85)
- L'Abissiou aux Sables-d'Olonne (85)


CENTRE – VAL DE LOIRE (3)

- Les Chemins - Domaine de Primard à Guainville (28)
- Arbore & Sens à Loches (37)
- Ezia à Montlivault (41)


BRETAGNE (2)

- La Gouesnière - Maison Tirel-Guérin à La Gouesnière (35)
- La Table des Pères - Domaine du Château des Pères à Piré-Chancé (35)


NOUVELLE-AQUITAINE (5)

- Aumì à Puymoyen (16)
- Ressources à Bordeaux (33)
- La Table Mirasol à Mont-de-Marsan (40)
- Maison Ruffet – Villa Navarre à Pau (64)
- La Maison de Pierre à Hasparren (64)


OCCITANIE (4)

- Rouge à Nîmes (30)
- Granit - La Mécanique des Frères Bonano à Colombières-sur-Orb (34)
- L'Arrivage à Sète (34)
- Villa Pinewood à Payren-Augmentel (81)


ALSACE (3)

- Enfin à Barr (67)
- de:ja à Strasbourg (67)
- Relais de la Poste à La Wantzenau (67)


HAUTS-DE-France (3)

- Arborescence à Croix (59)
- Pureté à Lille (59)
- Rozò à Marcq-en-Baroeul (59)


ILE-DE-FRANCE (7)

- Omar Dhiab à Paris 1er
- Maison Ruggieri à Paris 8e
- Astrance à Paris 16e
- Ōrtensia à Paris 16e
- Anona à Paris 17e
- Mallory Gabsi à Paris 17e
- Villa9Trois à Montreuil (93)


Jeune chef et chef mentor

En plus de la première étoile, le prix du jeune chef, remis par Florent Menegaux, président de Michelin, est attribué à Mallory Gabsi, 26 ans, vu dans la 11e saison de «Top Chef». Le jeune Belge n'a ouvert son restaurant parisien qu'en avril 2022.

Le prix du chef mentor, lancé l'an dernier avec Thierry Marx, est lui remis à Michel Troigros, qui vient de laisser officiellement le piano de sa maison de Ouches à son fils César. C'est pour sa transmission envers ses fils, César et Léo, mais aussi son accompagnement de nombreux autres talents qu'il est reconnu par le Michelin.

8 tables étoiles vertes

Les nouvelles tables distinguées de l'étoile verte de la durabilité:

- Le Château de Beaulieu-Christophe Duffosé à Busnes (62)
- de:ja à Strasbourg (67)
- Jardin Secret à Cotignac (83) ; La Bòria à Veryas (07)
- Le Doyenné à Saint-Vrain (91)
- Les Chemins – Domaine de Primard à Guainville (28)
- Ruche à Gambais (78)
- Villa Pinewood à Payrin-Augmontel (81)


Ils portent à 90 le nombre total de restaurants distingués de l'étoile verte en France.

Le palmarès complet des étoilés connu vers midi

Après Cognac l'an dernier, Bibendum poursuit sa politique de décentralisation en Alsace. 1500 personnes étaient attendues au Palais de la musique et des Congrès de Strasbourg: 550 chefs français, 300 élèves des écoles hôtelières de la région, des journalistes...

Après l'émotion suscitée lundi dernier à l'annonce des rétrogradations de Savoy (Paris) et Coutanceau (La Rochelle), mais aussi de la Table de l'Alpaga (Megève), Jean-Luc Tartarin (Le Havre) et le Restaurant ­Michel Sarran (Toulouse), qui passent de deux à une étoile, le Guide rouge espère bien faire de sa cérémonie 2023 une «une très belle fête», selon les mots de son patron, Gwendal Poullennec.

L'an dernier, deux tables avaient décroché les trois étoiles: La Villa Madie de Dimitri Droisneau (Cassis) et Plénitude d'Arnaud Donckele à Cheval Blanc (Paris).

La cérémonie, retransmise en direct sur le site du Guide Michelin, doit se terminer vers midi. Outre les une, deux et trois étoiles, seront distribués des étoiles vertes de la durabilité, ainsi que des prix spéciaux (salle, sommellerie, pâtisserie, jeune chef, mentor).

Des festivités dès dimanche en attendant la cérémonie

De nombreux invités sont arrivés dès dimanche. La Collectivité européenne d'Alsace avait organisé un déjeuner en présence des représentants des métiers de bouche ( boulangers, pâtissiers, charcutiers...), dont le service était assuré par les élèves des lycées hôteliers de la région. Le repas a été dupliqué à 1900 couverts, le soir, pour proposer au grand public un dîner solidaire afin de venir en aide aux jeunes chefs.

Dans la journée, des activités ont été organisées à Strasbourg, Colmar et alentour: immersion dans une brasserie alsacienne, visite de la Bibliothèque des Dominicains de Colmar, découverte du Château du Haut-Kœnigsbourg, dégustation de fromages alsaciens… Dimanche soir, 500 invités ont participé à un dîner organisé au cœur de la Distillerie Massenet, réalisé par le chef Gérard Goetz ( Chez Julien). 44 choucroutes royales ont été servies par des jeunes femmes en tenue traditionnelle.

Les 35 tables préférées du Figaro dans toute la France : http://www.lefigaro.fr/gastronomie/les-35-tables-preferees-du-figaro-20230303


Guide Michelin 2023 : les restaurants étoilés : http://www.lefigaro.fr/lifestyle/dossier/guide-michelin-restaurants-etoiles-bib-gourmand

WSJ : China to Create New Top Regulator for Data Governance

China to Create New Top Regulator for Data Governance
Beijing’s plan to streamline regulatory structure would bring all data-related issues under a single agency

SINGAPORE—China is set to create a new government agency to centralize the management of the country’s vast stores of data, as Beijing seeks to address data-security practices by businesses and streamline its regulatory structure.

The new national data bureau is set to become the top Chinese regulator on various data-related issues, people familiar with the matter said, in a shift from the current structure in which multiple ministries share oversight.

The plan to establish the agency is expected to be discussed and approved at the National People’s Congress during its annual session, which will run through March 13, they said.

If established, the agency would rule on whether multinational companies can export data generated by their operations in China, they said. It would also set and enforce data-collection and sharing rules for businesses, they said. For instance, it could bar companies from collecting certain kinds of consumer data, or vet the data that domestic companies plan to share with foreign business partners to check for potential national-security breaches, the people said.

The new data regulator would also investigate various issues in the digital domain, such as the use of algorithms for data manipulation or for inducing internet addiction among minors, the people said, as well as identifying data-security vulnerabilities that are prone to cyberattack.

The National People’s Congress and State Council Information Office, which handles press inquiries on behalf of the Chinese government, didn’t respond to requests for comments.

The plan would bring a more streamlined approach to data governance, establishing a single go-to regulator on data-related issues as businesses deal with an increasing number of rules and laws surrounding data.

Still, technology executives familiar with the plans have expressed concern over whether a new regulator would stifle innovation in the already bruised technology sector, coming on the heels of a two-year crackdown on powerful internet companies.

Currently, data regulation in China is handled by several agencies, including the Cyberspace Administration of China, the Ministry of Industry and Information Technology and the National Development and Reform Commission, the country’s main economic planner. The involvement of multiple authorities has left businesses confused at times about which body to approach on compliance issues, industry executives have said.

The new bureau will hold a similar status as the State Anti-Monopoly Bureau, which is headed by a deputy-minister-level official, the people said. After the antitrust bureau was elevated in 2021 from a small department, it became better equipped to access resources across various government agencies to scrutinize mergers and acquisitions.

Regulators around the world have been dealing with the large volumes of data generated by digital activity. Europe began enforcing a robust privacy law in 2018 known as the General Data Protection Regulation. In the U.S., which doesn’t have a federal-level law on data privacy, the Federal Trade Commission has been exploring new regulations to enhance online privacy protections.

Beijing has also introduced various laws and regulations to oversee handling of data held by internet companies amid growing consumer concerns around data privacy, in line with the global regulatory trend.

In recent years, China has curbed data collection by technology companies, though policy analysts have said the rule is unlikely to limit the state’s widespread use of surveillance. It has forbidden certain data from leaving China, especially that which it considers critical to national security, and has required regulatory approval for dispatching certain data overseas. It has also compelled internet companies to share some algorithms with regulators.

Such rules have led to growing compliance costs for companies. Multinationals, including Apple Inc. and Tesla Inc., have set up new data centers in China to store more data locally. Both domestic and multinational companies are going through costly and time-consuming steps to map how data is transferred.

The burden on regulators is also growing. They must review a large number of security-review applications from businesses related to overseas data transfers, as well as checking various data practices. When it comes to regulating algorithms, some technology experts have raised the question of whether government officials are equipped with the expertise to handle such reviews.

Beijing has clamped down on powerful internet companies in recent years over alleged data breaches. In July last year, authorities imposed a $1.2 billion fine on Didi Global Inc., a ride-hailing firm, for violating rules pertaining to data practices. Beijing launched an investigation of Didi days after its blockbuster U.S. initial public offering.

>>> Europe : Brokers Upgrades & Downgrades - 6th of March 2023 V2(+)

>>> Up
* Accor Raised to Overweight at Barclays; PT 36 euros
* B&M European Raised to Outperform at RBC; PT 550 pence
* EDP Renovaveis Raised to Outperform at Exane; PT 24.10 euros (+)
* Electrolux Raised to Buy at Longbow; PT 180 kronor
* EnQuest Raised to Equal-Weight at Barclays; PT 29 pence
* Fabege Raised to Buy at Pareto Securities; PT 104 kronor (+)
* Kingfisher Raised to Buy at Jefferies; PT 330 pence
* Lufthansa Raised to Buy at HSBC; PT 13.60 euros
* LVMH Raised to Buy at HSBC; PT 999 euros
* Nichols Raised to Buy at HSBC; PT 1,200 pence
* Purplebricks Raised to Outperform at Davy (+)
* Rathbones Group Raised to Hold at Jefferies; PT 2,000 pence
* Richemont Raised to Buy at HSBC; PT 180 Swiss francs
* SIG Group Raised to Buy at Goldman; PT 28.50 Swiss francs
* Tesco Raised to Buy at Jefferies; PT 310 pence
* Vir Biotechnology Raised to Overweight at JPMorgan; PT $34

>>> Down
* Bakkafrost Cut to Neutral at SpareBank; PT 660 kroner (+)
* Bonheur Cut to Hold at ABG; PT 300 kroner
* Eurofins Scientific PT Cut to 50 euros at Jefferies
* Euronav Cut to Hold at Deutsche Bank
* Grifols Cut to Equal-Weight at Morgan Stanley; PT 14 euros
* H+H Cut to Sell at Nordea; PT 100 kroner
* InterContinental Hotels Cut to Equal-Weight at Barclays
* INWIT Cut to Neutral at Citi; PT 12.50 euros
* Kamux Cut to Hold at Handelsbanken
* KB Home Cut to Underweight at JPMorgan; PT $32.50
* Nestle Cut to Underperform at RBC; PT 95 Swiss francs
* Reckitt Cut to Hold at Deutsche Bank
* *TAYLOR WIMPEY CUT TO ADD VS BUY AT PEEL HUNT
* Telefonica Deutschland Cut to Neutral at Citi; PT 3.10 euros

>>> Initiation
* Bristol-Myers Rated New Hold at Jefferies; PT $62
* Eli Lilly Rated New Hold at Jefferies; PT $290
* ID Logistics Rated New Buy at Stifel; PT 350 euros
* Merck & Co Rated New Buy at Jefferies; PT $125
* Pebble Group Rated New Buy at Shore Capital; PT 151 pence (+)
* Pfizer Rated New Hold at Jefferies; PT $43
* Wood Rated New Hold at Peel Hunt; PT 200 pence

>>> Call
* Covestro’s Recovery Now Priced In, Exane Downgrades to Neutral (+)
* Grifols Downgraded at Morgan Stanley on Margin Recovery Caution
* Morgan Stanley’s Wilson Sees Chance of Short-Term Equity Rally (+)
* Nestle Cut to Underperform as RBC Questions Investment Case
* Rathbones Loses Only Sell as Jefferies Upgrades on NII Outlook
* Telefonica Deutschland Cut at Citi, Risk Appears Balanced

>>> Stoxx 600 Pre-Market Indications

  • Rheinmetall (RHM TH) +2.6%
    • Rheinmetall to Join Germany’s DAX Index
  • Nel (D7G TH) +2.3%
  • ASML (ASME TH) +1.3%
  • Acciona (AJ3 TH) +1%
  • Lufthansa (LHA TH) +1%
    • Lufthansa Raised to Buy at HSBC; PT 13.60 euros
  • Ryanair (RY4C TH) +1%
  • Nokia (NOA3 TH) -0.6%
    • Singaporean Telecommunications Company Trials Nokia’s IP
  • Ferrari (2FE TH) -0.9%
  • Telefonica Deutschland (O2D TH) -1%
    • Telefonica Deutschland Cut at Citi, Risk Appears Balanced
  • Aroundtown (AT1 TH) -1.1%
  • Covestro (1COV TH) -1.4%
    • Covestro Cut to Neutral at Exane
  • Repsol (REP TH) -1.6%

>>> TradeGate Pre-Market Indications

DAX:
  • Vonovia (VNA TH) +1%
  • Fresenius SE (FRE TH) +0.9%
  • Covestro (1COV TH) -1.4%
    • Covestro Cut to Neutral at Exane
MDAX:
  • Rheinmetall (RHM TH) +2.9%
  • Lufthansa (LHA TH) +1.1%
    • Lufthansa Raised to Buy at HSBC; PT 13.60 euros
  • Telefonica Deutschland (O2D TH) -0.5%
    • Telefonica Deutschland Cut at Citi, Risk Appears Balanced
  • Nordex (NDX1 TH) -0.5%
SDAX:
  • SFC Energy (F3C TH) +4.7%
    • EQS-News: SFC Energy AG and its strategic partner FC TecNrgy Pvt Ltd. secure major order from the Indian Ministry of Defence
  • Hensoldt (HAG TH) +2.1%
  • Shop Apotheke (SAE TH) +1.5%
  • SGL (SGL TH) -1%

FT : Beware the European optimism trap

Beware the European optimism trap
Many of the factors that have boosted the region’s equities in the year to date are likely to fade as 2023 progresses

The European Commission’s consumer confidence index could be seen as an economist’s attempt at dark humour — since it was launched in the 1980s, the gauge has always been negative, with fluctuations just reflecting relative shades of gloom.

While the commission’s index suggests that eurozone consumers today are only modestly downbeat (with a level of minus 19 points in February compared with minus 29 last September), other reflections of Europe’s macro picture have become positively sunny.

Europe’s double-digit equity market returns so far this year are handily outpacing developed-market peers. Meanwhile, economic data has sharply surprised expectations to the upside. Only months ago, most forecasts assumed a 2023 recession.

The growing risk today is that investors simply assume these trends will continue. While that’s always possible, the positive macro and market forces are likely to fade as the year progresses. For those investors who have benefited from strong gains this year, it makes sense to consider taking some profits off the table, for at least four reasons.

First, the bump in economic activity from China’s reopening after Covid-19 lockdowns is likely to prove a one-off rather than a sustained support for European growth. With Asia now representing more than 20 per cent of Euro Stoxx 600 revenues, according to JPMorgan, and China alone around 10 per cent of overall European exports, it is no surprise that the pent-up Chinese demand is helping European equity sentiment and regional activity.

But in contrast to much of the developed world, where a post-pandemic splurge in spending was reinforced by large fiscal transfers, Chinese consumers seem likely to quickly revert to a more cautious stance. They face uncertainty around the critical property sector that is the basis of much Chinese household wealth creation. At the same time, the government remains intent on pursuing policies to support the economy over the longer-term versus short-term “floods” of liquidity-fuelled growth.

Second, the monetary backdrop in Europe will be getting significantly tighter at a time when global liquidity is also being withdrawn. A run-off of the European Central Bank’s bond portfolio is set to begin this month. And given growth is resilient and inflation remains multiples above the central bank’s target, there is likely to be a continuation of rate rises to take monetary policy further into restrictive territory. The ECB is “catching up” to the Federal Reserve — with the impact of the tightening ahead to be increasingly felt as 2023 progresses.

Third, and part of the ECB’s challenge, will be the direction of natural gas prices, which remains highly uncertain. The region clearly benefited in recent months from milder than expected winter weather and business efforts to limit gas consumption.

That has led to high storage levels and influenced a sharp fall in prices. Benchmark wholesale gas prices in late February tipped below €50 per megawatt hour, their lowest level since September 2021 and a fraction of the all-time high of €320 reached last August.

Still, prices remain well above prewar long-term averages, and there is a wide cone of possible outcomes for prices this year as countries seek to replenish reserves. Will Russian gas deliveries fall further? How much will China compete for supply? This is not a macro support one should count on.

Fourth and finally, Europe — like the US — has a potential fiscal fight in store this year. The region’s stability and growth pact that requires fiscal prudence was suspended in 2020 but is set to come back into force in 2024.

There is hope that reform of the fiscal rules could help ease government burdens, especially for more indebted countries such as Italy where the debt-to-GDP ratio has risen to nearly 150 per cent (versus the bloc’s 60 per cent long-term target).

For now, though, there are proposals but no agreement. It’s reasonable to expect this to come to a head over the summer (possibly sharing headlines with US debt-ceiling deadlines) so any new framework is resolved in time for year-ahead budgetary discussions.

Even with modest reforms and potential economic support from the ECB through its transmission protection bond-buying instrument, probable fiscal belt tightening next year will coincide with higher interest rates and less external growth support from China and the US. That seems highly probable to get many investors in Europe gloomy again.