I cautioned earlier on Commodities suggesting a pullback,
Why so, when there have been talks of a commodities super cycle?
* China economy could be slowing - as reflected in the down trend of recent PMIs
* Resurgence of the USD does not bode well for commodities class in general
* Commodity/resource stocks may have already run too strongly and due for a pullback - too much built in optimism
* Watch the AUD, commodity currency
* Recovery narrative may start to wane if economic data does not suggests so (we will see this in coming days)
* Market concerns over higher long term yields reining in economic growth
Source: Bloomberg
Led by oil (OPEC+ anxiety, China PMI demand fears, and scary virus headlines)...
The dollar was flat to lower...
Source: Bloomberg
But Gold was dumped...
And while silver slipped lower late on, it managed to hold some gains...
Finally, we note that the market is now pricing in some serious tightening by The Fed over the next few years...
Source: Bloomberg
And as rates rise, financial conditions are tightening in the US (now at their tightest in 3 months)
