4 trading themes for 2023: #3 Europe is a weather trade (but the sun can't shine forever)

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4 trading themes for 2023: #3 Europe is a weather trade (but the sun can't shine forever)

<p class="MsoNormal">The number one thing the world has to be thankful at the
turn of the year is good weather in Europe, and to a lesser extent North
America.</p><p class="MsoNormal">Europe is a weather trade right now and the forecast is
good. November was remarkably warm in Europe, December had a short-lived cold
snap but the next two weeks are warm.</p><blockquote class="twitter-tweet" data-partner="tweetdeck"><p dir="ltr" lang="en">Europe GEFS (GFS Ensemble) temperature anomaly 06z forecast for Dec 30 to Jan 15 from Pivotal Weather. <a href="https://twitter.com/hashtag/Natgas?src=hash&ref_src=twsrc%5Etfw">#Natgas</a> <a href="https://t.co/wwPYcRG9BL">https://t.co/wwPYcRG9BL</a> <a href="https://t.co/DvYON9AABd">pic.twitter.com/DvYON9AABd</a></p>-- RonH (@Ronh999) <a href="https://twitter.com/Ronh999/status/1608818241962496000?ref_src=twsrc%5Etfw">December 30, 2022</a></blockquote><p class="MsoNormal"> Beyond that, it's anyone's guess but even
with what's happened already, European energy storage will hold up. In North
America, a light hurricane season didn't disrupt energy and after the Christmas
travel havoc, the next week or so is set to be balmy.</p><p class="MsoNormal">The investing theme for the decade is energy. The
global challenge this decade is to deliver cheap, reliable and increasingly
clean energy. It's a staggeringly difficult task and I'm skeptical that it will
happen in the kind of timeline that anyone wants but every day of warm winter
weather is a bonus.</p><p class="MsoNormal">The problem for Europe is that this isn't just a 2022
problem or 2023 problem. The LNG cavalry doesn't arrive until 2025 or 2026 and
by that point, European government budgets will be in shambles. </p><p class="MsoNormal">The euro and pound certainly aren't expensive but there's
no reason to buy them unless there's some kind of dramatic change in
. Competitiveness is being eroded daily by high energy costs and inbound
long-term investment is nil.</p><p class="MsoNormal">A much better trade on shifts in global trading patterns
is in the Mexican peso or Mexican assets in general.</p><p class="MsoNormal"><a href="https://www.forexlive.com/news/4-trading-themes-for-2023-4-give-china-a-kiss-20221229/" target="_blank" rel="follow">4 trading themes for 2023: #4 Give China a KISS</a></p>

                This article was written by Adam Button at www.forexlive.com.

Source: 4 trading themes for 2023: #3 Europe is a weather trade (but the sun can't shine forever)

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