Editorial

Logistical dreams and nightmares

The logistics process represents a microcosm of the forces acting on the 21st century economy. It encompasses increasingly complex and global supply chains with all the attendant problems of managing in a multipolar world. It is also undergoing a process of rapid change, triggered by the impact of technical progress on the demand and supply sides of the economy. But as we have learned over the past 30 years, managing the supply chain is one of the keys to ensuring profitability, and the technical revolution will ensure that this remains the case over the coming years.

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Shifts in cross-asset correlations

Over the last year, investors had to realise painfully that even multi-asset approaches do not protect against severe setbacks. Multi-asset funds faced the strongest drawdowns since 2009, exaggerated by a strong rise in risk-asset correlations. We delve into the structural and cyclical changes in correlations and show recent trends in risk-asset and risk/ safe-haven correlations. We argue that the current regime of elevated correlations among risk assets and low-risk/safe-haven correlation is set to prevail for now, but that elevated correlations among risk assets or equity regions do not mean that differentiation does not matter.

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Self-driving trucks could revolutionise the industry

While there is a lot of buzz around self-driving cars, interestingly, the economic and operational incentives in the adoption of autonomous technology could have a much bigger impact on the trucking industry. And this may drive trucks to become automated even sooner than cars (no pun intended). Brands such DAF, Daimler, Iveco, MAN, Scania and Volvo are working on the automated technology and even participated in the European Truck Platooning Challenge 2016 covering several cities of Europe driving in columns on public roads. Two Japanese automakers, Isuzu Motors and Hino Motors, are the recent entrants in the arena.

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Equities

Commodities

Oil prices in a summer slump

The price rally on the oil market is over for now. At the end of July, the price for Brent oil fell to a 3-month low. Selling pressure has been created by the temporary return of a halt in production, an oversupply of gasoline and the withdrawal of financial investors. The notable decline in US oil production and the continuing robust demand suggest that oversupply will disappear later this year and the global oil market will be balanced in early 2017 at the latest. We keep to our price forecast of USD 50 a barrel for Brent by the year-end.

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Asia