Insights

Macro Insights Weekly - What to make of the commodity cycle?

1 April 2024
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  • A soft patch in commodities helped the global disinflation trend in 2023. But as demand remains resilient, commodities may well have bottomed. This could complicate the inflation picture ahead.
  • China’s demand weakness contributed to the softness in energy and metals prices last year.
  • US-led supply side response certainly tempered energy prices.
  • But markets appear buoyed by a likely recovery in Chinese demand.
  • Additional boost to global commodity supply looks unlikely this year.
  • While a price surge is unlikely, a commodity turnaround could end the ongoing disinflation trend.

 

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