Commodity Risks

For a while we have been saying that continued hikes in US interest rates would have a negative effect on the major commodity bull run of the past 3.5 years, as the speculative element would exit the market. However, as recent US economic data surrounding consumer confidence and the housing market has come in weaker than expected, there are clear downside risks to our year-end forecast for the Fed funds rate of 5.75%. Yet, the prospect of an end to the US tightening cycle has not been supportive of commodities lately. In fact, market focus has turned towards the possibility

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