With the US payroll report surprising the trade with better than expected results for the month of July, new highs in US equities and anecdotal evidence of a possible bottoming in the Chinese economy (positive Alibaba earnings and a rise in iron ore and copper imports), it would seem like the groundwork has been laid for an improvement in “animal spirits.”
China
This Week in Commodity Markets
What the Fed gave to commodity markets recently might be temporarily taken away by the “Brexit” fiasco.
How Will Commodities in the Summer of 2016 Be Defined?
Since the March lows, several physical commodities have forged rallies that few expected, and with even fewer anticipating the magnitude of those rallies.
US Economy Continues On a Slow, Upward Slope of Recovery
The markets have now “reflated” and have partially corrected!
Forward Progress in the US Economy Has Disappointed
The “talking heads” and “talking fund managers” are suggesting that the rally in commodities is done, unjustified and poised to be reversed.
Increased Odds of Growth in the US and Abroad
Just when it appeared that the commodity markets were overbought and poised to correct, the US Fed was found to be on-hold “to at least June.”
Prospects of a June Fed Rate Hike?
We think that commodity markets were short-term and perhaps even intermediately overbought going into their recent highs.
Growth in the Rest of the World Showing Signs of Improvement
Just when it appeared that commodities were settling back on a deflationary track, leadership surfaced in fresh buying interest in gold, silver, platinum, soybeans, corn and crude oil.
Mid-March Crisis
The recent retrenchment in bean oil, crude oil, sugar, corn, equities, cattle, gold, platinum, palladium and copper as well as significant rallies in Treasuries and the Japanese yen mostly started around March 14th, and some have labeled the period since mid-March as a “crisis.”
Global Markets May Have a Brighter Outlook
An improvement in US and European manufacturing activity as well as news that the “official” Chinese PMI number climbed back into expansion territory for the first time in 8 months bodes well for a more sustainable global recovery effort.