Capital Chronicle is written from Grenoble, France by RJH Adams.

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Baltic Dry Index and the Supercycle: decoupling debate rejoined

Posted on April 03, 2008

A little over a quarter ago this update on the Baltic Dry Index was posted here. Today the graph looks like this:A very useful comment last time pointed out that it is also worth watching forward freight agreements (FFA), derivatives used by shippers to (amongst other things) insure against rate volatility, when guessing the direction of freight rates. In December, Q1 2008 FFAs were in contango versus spot - at odds with the message of the then version of the above graph. One quarter of actual data later suggests the BDI/10 year Treasury measure was the better leading indicator.But this is de...

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backwardation , china , commodity , economy , momentum , short term , supply side , volatility