Commodity markets are seeing nearly a perfect storm of bearish factors during the first 2 weeks of 2016.
Treasuries
Additional Commodity Pressure in Anticipation of an Interest Rate Hike
In looking ahead to the coming week, we expect additional commodity pressure going into the FOMC meeting off of a stronger dollar in anticipation of an interest rate hike.
Stronger Chance For a December Federal Reserve Interest Rate Hike
A much better than forecast look at October US jobs data has strengthened the chances for a December Federal Reserve interest rate hike.
Fed Not Confident in Pace of US Growth
With the Fed taking a pass on hiking rates in September, a reduction in their 2016 and 2017 growth forecasts, and only minimal dissension within their ranks against a steady policy stance, it appears that they are not confident enough in the pace of US growth to make a move at this time.
Improving Global Sentiment, Marketplace
In the wake of the capitulation event a couple of weeks ago, global sentiment has continued to improve.
Soaring Treasuries Suggesting US Recovery is Not Sustainable
World Economy Factoring a Return to Recession?
The list of positive global data flows expanded last week with improvements in UK Unemployment, China Retail Sales, and US February and March Industrial Production figures.
The Improvement in the Global Economy Continues
The improvement in the global economy continues, but the recovery pace obviously isn’t providing much in the way of support for the commodity markets.
A Case For Trend Change in 30 year Bonds
Many times, changes in trends come from the outcome of the biggest events. The conclusion of the latest calamity out of Washington and the recent appointment of the dovish, Janet Yellen to replace Ben Bernanke may be what the bond market needs to wake up from its recent 6 month slumber.