Several weeks ago we spoke of a brightening of economic skies, but in this publication, we have to note some short-term vulnerability potential in markets that are overbought and/or markets that might be overly sensitive to a shift by the Fed back toward a more hawkish stance at upcoming FOMC meetings.
China
Commodities Should See Fewer Negative Outside Influences
After a slight brightening of the skies, the US Fed has stepped in and stoked recovery efforts further with a reduction in the number of anticipated 2016 rate hikes and a nod to the importance of international headwinds in their future policy decisions.
The Pace of Improvement Remains Difficult to Detect
The brightening of the economic skies continues, but the pace of improvement remains difficult to detect.
Large Grain Supply May Not Be Enough!
Several years ago, the amount of food consumed inside the home was surpassed by what was consumed outside of the home.
Is the Long, Dark Shadow of Deflation Starting to Fade?
Perhaps the moderation is the result of many markets having already priced-in anemic growth, oversupply and little threat to supply.
Signs of Slowing Inside and Outside the US
It seemed like the initial threat to western markets was from China, but that threat has expanded with a lengthening pattern of slack US data.
New Year, Return to Recession?
As 2016 begins, the commodity bears are getting close to a “perfect storm” from all directions.
The Deflationary Selling Binge in Commodities Has Continued with a Vengeance
The deflationary selling binge in commodities has continued with a vengeance, with sagging crude oil prices leading the way.
Classic Physical Commodities Under Spillover Pressure
The markets have seemingly become comfortable with a “one and done” rate hike from the Fed in December or sometime in early 2016.
Potential Boost in Demand for US Commodities
Risk sentiment received a shot in the arm last week after the latest FOMC meeting tamped down concerns over global growth and used more decisive language in favor of a December interest rate hike.