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While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of whether more financial institutions run into trouble, …
20th March 2023
Commodity markets were not spared the effects of widespread turmoil in the global banking system. Most prices ended the week lower as investors fled risky assets. The gold and silver prices bucked this trend and surged higher; unsurprising in a week …
17th March 2023
While commodity prices have also been caught up in the chaos stemming from the banking sector turmoil, so far the impact hasn’t been too alarming as price falls for most commodities haven’t been overly large. Where those falls have been greatest, such as …
Commodity prices have tumbled as concern about a banking crisis has grown. The downside risks to our forecasts, which we recently attributed to higher interest rates, now include banking sector stress. There has been a renewed fall in commodity prices …
16th March 2023
The fracturing of strategic supply chains into US and China trade blocs threatens Australia’s existing significant trade with China but also presents Australia with an opportunity to align its trade relationships with its existing security …
15th March 2023
Even though US non-farm payrolls increased by 311,000 in February, the report contained signals that were consistent with slowing inflation, prompting a fall in US interest rate expectations today. Despite this, commodity prices are still broadly down on …
10th March 2023
The National People’s Congress (NPC) reports struck a cautious note on the outlook for economic activity in China this year. Fiscal stimulus will be limited and efforts to prevent “disorderly” expansion in the property sector are to continue. That said, …
8th March 2023
Higher rate expectations drag many commodity futures curves lower Most commodity prices fell and futures curves shifted lower this past month as higher interest rate expectations in advanced economies clouded the demand outlook. This is consistent with …
7th March 2023
China’s imports were weak in January-February, but commodity imports fared better. What’s more, we think crude oil imports, in particular, will pick up from here given the resurgence in travel demand. China’s January-February trade data (published today) …
It was another fairly quiet week in commodity markets, with prices caught between diverging narratives. Rather perversely, robust economic data in advanced economies weighed on commodity prices. This is due to expectations that economic resilience will …
3rd March 2023
Overview – We think prices will drop a little further in the coming months as economic slowdowns in advanced economies weigh on commodities demand, even as China’s economic recovery takes hold. However, the prospect of a higher for longer Federal Funds …
2nd March 2023
The February PMI data out of China suggest economic growth is rebounding rapidly. While growth should moderate over the second half of year, it still points to higher metals and crude oil demand. Overall, the PMI surveys suggest that the risks to China’s …
1st March 2023
It has been a tumultuous year since the outbreak of war in Ukraine. Energy markets are still in a state of flux, though they have calmed significantly. (The prices of European gas and Brent crude have fallen ~85% and ~35% from their respective peaks.) …
24th February 2023
The war in Ukraine. Ageing populations. Rising temperatures. Investors are having to grapple with a formidable range of uncertainties around the long-term outlook for the global economy and markets. Their challenge is compounded by the fracturing of the …
22nd February 2023
We expect the wheat price to remain high this year as events in Ukraine and drought in other key producers hurt supply. Although the wheat price should drop back after this, the worsening impacts of climate change will put prices back on an upward trend …
Most commodity prices fell this week (1 & 2) due to concerns about the persistence of high inflation in the US. Data showed US CPI inflation coming in slightly stronger than expected in January, pushing up interest rate expectations and giving a boost …
17th February 2023
It was a fairly quiet week in commodities markets, although oil prices rose on concerns about earthquake-related disruption to exports from the Turkish port of Ceyhan and Russia’s announcement of a 0.5m bpd cut to production in March. By contrast, the …
10th February 2023
Overview – We think prices will ease back in the coming months as optimism about China’s reopening is tempered and slower economic activity in advanced economies weighs on demand. However, the prospect of Fed easing and stronger economic growth in 2024 …
3rd February 2023
The EU’s ban on imports of Russian petroleum products will come into force on Sunday, which could raise EU fuel prices and weigh on Russia’s product exports. However, we suspect Russia will offer steep discounts to non-EU buyers , which will help to …
The January survey data out of China point to a revival in oil demand, but relatively flat metals demand. This is consistent with our view that the recent rally in metals prices is a little premature. We think prices will rise more sustainably later this …
1st February 2023
After rising sharply for much of this year, the Lunar New Year holiday in China meant that commodity prices generally took a bit of a pause this week. The only exceptions were natural gas prices, which continued to plunge, owing to lower-than-normal …
27th January 2023
Markets still nervous over EU natural gas supply, despite high storage This is the first edition of a new monthly publication in which we will outline the latest moves in commodity futures markets and assess how they relate to our own view on …
25th January 2023
The end of China’s zero-COVID policy continued to support most commodity prices this week, with many industrial metals prices extending their recent rallies. Economic activity appears to be recovering unexpectedly quickly in China and we have upgraded our …
20th January 2023
The theme of global economic fracturing, which was the focus of our Spotlight Series of research last September, is at the centre of economic discussion in 2023, including at Davos. We held an online drop-in session yesterday to update clients on our …
19th January 2023
The election of left-wing candidate Lula for a third term as Brazil’s president is unlikely to accelerate Petrobras’ sluggish shift towards large scale biofuel production. We expect proposed oil sector reforms to weigh on biofuel demand, while ongoing …
18th January 2023
China’s rapid reopening and the likelihood of policy stimulus there has improved the macro-economic backdrop for commodities in 2023. But with developed economies in recession, and a somewhat stronger dollar and weaker US equities in Q1, we think a …
16th January 2023
The dismantling of China’s zero-COVID policy has come quicker than we and many had expected. Whereas we previously thought the first quarter would bring the worst of the economic disruption from surging COVID cases, it now appears the worst is behind us …
13th January 2023
Commodity imports generally rose in December, but fell in 2022 as a whole. In a possible sign of optimism around reopening, soybean imports skyrocketed. China’s unexpectedly swift switch to living with COVID should see commodity imports, particularly …
Disruption from China’s reopening is fading faster than we had expected and we have revised up our forecast for growth there from 2.0% to 5.5%. This means that global GDP growth will be stronger than we had expected this year and energy inflation will …
12th January 2023
Most commodity prices declined this week, with energy prices falling especially sharply. Unseasonably mild weather in Europe and the US weighed on heating demand, prompting a plunge in gas prices. The European natural gas price currently sits at levels …
6th January 2023
The December survey data out of China were uniformly downbeat. The plunge in the official services PMI points to a fall in oil demand, but we suspect that the hit to industrial activity (and metals demand) has been more modest. Looking ahead, we expect …
3rd January 2023
It was a fairly quiet week in commodity markets. The only notable move was a slump in natural gas prices. The EU eventually agreed its long-discussed natural gas price cap early in the week, but it comes with so much conditionality that it is difficult to …
23rd December 2022
Unusually, investors have been reducing their net-long position in the oil futures market, but increasing their position in industrial metals. We suspect this reflects optimism about China reopening at a time when the global economy is entering …
22nd December 2022
The raft of inflation data and central bank policy decisions were key drivers of prices this week, but to some extent China stole the show. We now think that a dismantling of the zero-COVID policy is well underway. On paper, the removal of restrictions …
16th December 2022
Click here to read the full report. Overview – Tight financial conditions and China’s biggest COVID outbreak yet mean global economic growth will slow further in the first quarter of next year, dragging most commodity prices lower. The slowdown will be …
This is part of a series of reports outlining our key macro and market calls for 2023. Click here to view the full series. We think most commodity prices will ease back in early 2023, at the height of the global recession and monetary tightening in …
The recent slump in oil prices tells us one thing – that demand concerns are in the driving seat. Given that we expect a further slowdown in global growth in Q1 2023, we think prices could fall further. The Brent crude oil price has fallen by about 16% …
13th December 2022
A few weeks ago, we flagged the growing downside risks to our oil price forecasts due to weak Chinese demand. Despite the loosening of China’s COVID restrictions since then, we think the end to the flagship zero-COVID policy will only come in April 2023 …
9th December 2022
Rather surprisingly, commodity imports generally ticked up in November, despite the wider deterioration in China’s trade position. However, we think this reflects undue optimism about an imminent pick-up in economic activity. Accordingly, we could see …
8th December 2022
Overview – We think slower global economic activity and a somewhat stronger US dollar will weigh on commodities prices in the coming months. However, the recession should prove relatively shallow and we expect prices to be picking up in late 2023, boosted …
5th December 2022
Commodity prices generally rose this week as Fed Chair Jerome Powell’s comments that smaller interest rate rises were likely led to a depreciation in the US dollar. Prices were also supported by news that China would relax some pandemic-related …
2nd December 2022
The latest manufacturing PMI data from China strengthens our view that China’s industrial metals demand growth slowed in November and will probably weaken further in December. China’s Caixin manufacturing PMI , released today, rose from 49.2 in October to …
1st December 2022
Global biofuel production unlikely to ramp up anytime soon … … as governments instead prioritise EVs as the future of green transport. As such, elevated food prices shouldn’t be exacerbated by biofuels competing for crops. Global food prices are at …
28th November 2022
There have been a few developments this week that have exacerbated downside risks to our current commodity price forecasts. First, new COVID-19 cases continued to surge to record highs in China, increasing the possibility of harsh widespread lockdowns . …
25th November 2022
Most prices fell this week as soaring COVID-19 cases in China raised concerns about the country’s commodity demand. Given the negative impact of COVID-related lockdowns on travel, it is no surprise that there was particular weakness in the price of …
18th November 2022
The negative correlation between the US dollar and the price of oil has reasserted itself in recent months, and we think it will persist as the looming global recession pushes the dollar higher and oil price lower. Although the price of oil hasn’t risen …
16th November 2022
OPEC supply drops but further falls to come OPEC’s monthly report for October showed a sharp drop in the group’s production, and further falls are likely if members are to abide by their new quotas from November. The OPEC Monthly Oil Market Report for …
14th November 2022
We think the combination of subdued domestic activity and an economic downturn in most major economies will hurt demand for Chinese economic output in the coming months, prompting lower production and therefore import volumes of agricultural commodities. …
Commodity prices surged late in the week on the back of a slump in the US dollar, a fall in US real yields and some easing of COVID-related restrictions in China. However, we doubt that this heralds the start of a renewed upturn in prices. The …
11th November 2022
As the global economy enters recession, the outlook for natural rubber (NR) demand appears bleak. What’s more, stocks are already high. We expect prices to fall further in the near term, before some recovery in late 2023 on hopes of monetary easing and a …
