The "multipolar world" will remain a major topic in 2024 as the rewiring of the global commerce system creates geopolitical risks & business model shifts that will last decades
The Dollar’s & Euro's share in global CenBank reserves dropped. Greenback accounted for 59.2% of globally allocated FX reserves in Q3 2023, down from a revised 59.4% in Q2, lowest since Q4 2022. Euro’s share in reserves also fell to 19.6% from 19.7%, while the participation of Japan's Yen rose to 5.5% from 5.3%. Source: HolgerZ, Bloomberg
Oh boy... Container shipping rates skyrocket 173%
Carriers diverted +$200 billion in trade from the red sea due to Houthi militant threats. shipping a 40-foot container from Asia to northern Europe now costs over $4,000, up +173%. Supply-chain issues are back.. Have markets been celebrating the end of inflation too soon? Source: Genevieve Roch-Decter, CFA, Bloomberg
MAP OF THE DAY: Sometimes, a picture is worth a thousand words. Container ships heading toward Europe and/or North America, with almost all avoiding the Red Sea (red)
More than two weeks after the launch of US-led 'Prosperity Guardian', the Houthis still rule in the Red Sea. Source: Javier Blas
Net effect of slowbalization is growing stagflation risk
Update "slowbalization" chart by IMF.
Ocean Freight
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MAP OF THE DAY: The number of ships that have diverted from the Red Sea and instead taken the 10/14-day longer route around Africa has risen to >100.
The map shows **container ships** declaring European ports as destination, with one only left in the Red Sea | Red Sea Source: Javier Blas
The supply chain / 3inflation risk ahead of 2024. Red Sea is now largely closed to traffic
That's 8.8 million bpd of daily oil transit, and nearly 380 million tons of daily cargo transit. Global traffic now will be rerouted around Cape of Good Hope, adding 40% to voyage distance (and even more to cost) Source: www.zerohedge.com
Global supply chain under threat after Iran-backed Houthi militants on ships in the Red Sea
We live in a world where geopolitical risks are playing a much higher role than during last decade. Current conflict in the Middle East is threatening global trade and suppy chain. These attacks by have already rocked global trade. And there could be more disruptions and price increases to come for shipments of goods and fuel. Several major shipping lines and oil transporters have suspended their services through the Red Sea as more than a dozen vessels have come under attack since the start of the Israel-Hamas war in early October.
