Bond markets have been supported by some market-friendly data and while Fed speakers were again mixed, it was the more dovish remarks that captured attention.
June 21, 2012
Commodity Update – Minerals and Energy August 2012
Commentary and forecasts on key non rural commodities - minerals and energy.
Commentary and forecasts on key non rural commodities – minerals and energy.
- Prices for most non rural commodities were lower over the past month, reflecting global growth outlook concerns. The gold price eased in early July, largely in response to USD appreciation, but pared losses following positive comments out of the ECB.
- Concerns about Europe continue to fluctuate on a regular basis as events unfold. Progress on establishing a banking union and comments from the ECB last month helped to bolster confidence, although markets appeared to be a little disappointed by the lack of action at the recent ECB meeting.
- Economic data over the past month has been soft, doing little to support the global growth outlook. Poor outcomes in Europe are likely to persist, while the Chinese economy has slowed notably and the US economic recovery has been more sluggish than expected. The subdued growth outlook will continue to weigh on commodity prices in the near term.
- As usual, we expect near-term movements in non rural commodity prices to remain volatile as macroeconomic events unfold. Further out, prices are generally expected to soften but remain elevated relative to history.
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