Lumber prices have enjoyed a robust rally since early 2019. A combination of easy US monetary conditions and falling bond yields have created a fertile ground for construction activity, which has forced lumber prices higher…
Highlights Base metals appear to be pricing the impact of the Chinese 2019-nCoV coronavirus in line with the 2003 SARS outbreak. We expect an earlier peak in reported (ex-Hubei) cases than is currently discounted by markets, implying…
Copper has suffered from the combined assault of a strong dollar, weak global manufacturing activity and, most recently, the dreaded impact on growth from nCoV-2019. However, an opportunity to buy the red metal is emerging.…
Global money and credit trends indicate that copper is poised for more upside. Our US financial liquidity index is rapidly escalating, which points toward a global economic recovery. Moreover, stronger global growth will harm the…
Base metals – aluminum and copper, in particular – are supported by global monetary accommodation from central banks. In addition, our China strategists expect modest fiscal and monetary stimulus from Beijing,…
Highlights OPEC 2.0 production discipline and the capital markets’ parsimony in re funding US shale-oil producers will restrain oil supply growth. Monetary and fiscal stimulus will revive EM demand. These fundamentals will push…
Base metals prices are more closely linked to EM activity than DM activity. Base metals prices are timely indicators of turning points in EM GDP cycles. Our proprietary indicators have been signaling a revival in commodity…
Highlights The seemingly interminable discussions around the “phase one” deal touted by US and Chinese trade negotiators notwithstanding, base metals prices are primed for a rally. The bottoming in base metals prices…
Highlights The slowdown in global industrial activity appears to have bottomed. This, along with an apparent shared desire for a ceasefire in the Sino-US trade war, points toward a measured recovery in manufacturing and global trade,…
Highlights The global manufacturing cycle is likely to bottom soon, and consumption and services remain robust. The risk of recession over the next 12 months is low. This suggests that equities will continue to outperform bonds. But…