As we indicated last week, outside market forces appear to be reaching a zenith, and with the noted letdown in the dollar in June, the hope of sidestepping a financial debacle in Europe, and the promise of ongoing aggressive QE from the ECB, it would not be surprising to see a persistent improvement in global economic sentiment.
US Dollar
Outside Market Forces Weigh Heavily on Commodity Prices
In all markets, there are inside market forces and outside market forces. What outside forces are affecting physical commodity prices?
A Recovery Unfolding at a Slower Than Expected Pace
The recovery of the US economy continues but at a pace that is disappointing for a variety of markets.
Macroeconomic Conditions Improving; Return to Growth
Macroeconomic conditions are improving, and the Fed Chairman feels confident enough to weigh in with her own “irrational exuberance” moment with respect to equity valuations.
Will the Global Economy Regain Momentum?
We had what appears to have been a watershed moment in financial markets over the last week.
Global Macroeconomic Prospects Are Improving
With a number of longer-term moving averages signaling reversals in several currencies, fresh record highs in a number of global equity market measures and crude oil prices managing to hold $10 to $12 a barrel above their 2015 lows, global macroeconomic prospects are improving.
Disappointing Performance in First Quarter of US Economy
The quickest and cleanest track to a major top in the Dollar was for US economic numbers to remain strong and for US economic strength to pull the Euro zone into self-propagating growth.
The Outlook for Physical Commodities Might Remain Negative
Without a dose of improved US economic news and a reversal in the Dollar’s uptrend, the outlook for physical commodities might remain negative.
Positive Shift in Demand Prospects
While the latest string of US economic data sparked some concern over growth prospects, there have been a number of bright spots from China and the Euro zone.
Negative Psychology From First Quarter to Remain
While US economic activity appears to have faltered a bit, evidence of recovery in the Euro zone is starting to surface.