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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
COMMODITIES
- In the past few weeks, we have seen that the momentum in some super-trending commodities such as lumber or copper has halted (and reversed), probably partly driven by the significant contraction in Chinese liquidity and the rise in uncertainty as DM economies delay the global reopening.
- On the other hand, oil prices have continued to rally with WTI front-month futures breaking above the $70 level last week and currently trading at its highest level since October 2018 (when US GDP growth peaked).
- Interestingly, when we look at the average monthly performance of each of the 7 sub-indexes of the Bloomberg Commodity Index (BCOM) when US CPI inflation stands above 2 percent since January 1991, the BCOM Energy Sub index is by far the best performer, averaging over 0.3% in monthly return when inflation rises above 2 percent.
- Hence, investors could continue to look at oil as a short-term hedge against inflation, especially if CPI prints surprise positively in June and July, which could push WTI front month futures to new highs.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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