Mind the gap

As shown in the chart
below, in a healthy market the value of bids and the value of offers tend to
move in tandem. During periods of stress – highlighted at points 1, 2, 3 and 4 – the gap between the two widens as merchants try to sell stock, while the
buyers make themselves scarce.

Since July last year the gap between the two was closing,
before the failed En Primeur campaign saw bids fall away. This week there has
been a small reversal of trend as bids rose for the first time in eight weeks.
Given that prices have remained stable over this period, could this lift prove
to be a boon to the market?  

Liv-ex_bids_offers_stress

1. Lehman Brothers collapsed

2. Merchants raise capital following the release of the
expensive 2010s

3. Failed 2011 En Primeur campaign 

4. Failed 2012 En Primeur campaign

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