When yields go up — especially now that the yield curve is flattening — this intensifies monetary restraint, which puts downward
pressure on commodities.
The Bloomberg Commodity Index (down over 28 % in a year) demonstrates the relentless downward
pressure on commodities - hard, soft, or liquid since late 2011.
This is arguably the most important of the points listed above regarding downward
pressure on commodities.
Favorable US Economic data in the weeks ahead should serve as the catalyst for the US Dollar to turn back higher, which in turn would likely exert lots of negative
pressure on commodities.
I wrote the tweet above last Friday afternoon when a sea of red on my computer screen got me thinking more critically this weekend about what exactly was the cause for the relentless downward
pressure on commodities (metals specifically).
A stronger dollar also intensified
pressure on some commodity - linked currencies such as the New Zealand dollar which tumbled 0.3 percent to 0.7129 per dollar.
That puts
pressure on commodity prices and drives up inflation.
The rising rates environment is also putting
pressure on the commodity, said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
Sluggish global growth and muted inflation continue to put
pressure on commodity prices, particularly those most exposed to global growth, like prices for industrial metals and oil.
As that upward pressure on real interest rates abates, so most probably will the downward
pressure on commodity prices (as well as the upward pressure on the U.S. dollar).
The Chinese economy is slowing (worryingly, opinion differs as to how much), maintaining downward
pressure on commodity prices, while Chinese stock prices continued to tumble in August in spite of huge intervention by the authorities.
Over time, the stronger global environment could also generate further upward
pressure on commodity prices and hence manufacturing costs, and on traded goods prices more generally.
Inflation expectations should ease, letting interest rates fall and easing the price
pressures on commodities.
Chinese growth continues to slow, keeping
pressure on commodity prices and sending deflationary impulses throughout the global economy.
One of Moyo's controversial arguments is that China's ascendency doesn't just put tremendous
pressure on commodity markets, but is likely to represent such a big demand shock that supply of key resources simply can't keep up.
Chinese growth continues to slow, keeping
pressure on commodity prices and sending deflationary impulses throughout the global economy.
Critically, the greatest impact will likely be felt not in reduced volumes in the short term, but in the consequent
pressure on commodity prices caused by lower - than - anticipated demand.
«Critically, the greatest impact will — initially — not be directly from reduced demand, but from the consequent
pressure on commodity prices,» said Spedding who was previously global co-head of oil and gas research at HSBC.
Not exact matches
JPMorgan is exiting physical
commodities trading, the bank said in a surprise statement
on Friday, as Wall Street's role in the trading of raw materials comes under unprecedented political and regulatory
pressure.
If true, expect more fuel to be added to the
commodities fire, further increasing drag
on global economic activity while adding to the already worrisome upward
pressure on inflation.
HOUSTON, Feb 5 - Oil prices settled lower
on Monday as rising U.S. output, a weaker physical market and recent dollar strength added to the
pressure from a widespread decline across equities and
commodities markets.
Stabilizing
commodity prices will gradually stop exerting downward
pressure on inflation.
Since then,
commodities trading has come under
pressure at big banks as funding costs have risen and regulators have clamped
on their ability to make bets with their own money.
Three months later, with broader
pressure mounting over Wall Street's involvement in the raw materials supply chain, JPMorgan would put its entire physical
commodity trading business
on the block.
We know that
pressures are beginning to build a little bit in the
commodities cycle and
on wages and salaries.
There has been volatility in financial markets and downward
pressure on the prices of many
commodities that Canada sells.
With market breadth drying up and industries such as energy and
commodities producing few winners in 2015,
pressure has increased
on a handful of megacap technology and consumer stocks to shoulder gains.
I continue to expect that we will gradually increase our exposure to inflation - protected securities and
commodities on substantial weakness in these areas, but as inflation
pressures are most likely still several years away, our primary concern here is with fresh credit weakness, and that concern still translates into a moderate exposure to interest rate fluctuations.
And China's depreciating currency amplifies the effect, since it cuts the purchasing power of Chinese buyers and puts even more downward
pressure on global
commodity prices.
This situation has put upward
pressure on international
commodity prices, many of which have increased considerably over this period, particularly in the resources sector, a trend that will benefit Australian exporters.
It is also worth pointing out that downward
pressure on the price of «paper» gold that was not supported by the «physical» market would inevitably result in the price of «paper» gold making a sustained and substantial move below the price of the physical
commodity, which hasn't happened.
The relative strength of farmland values has provided support for farm finances despite the ongoing
pressure of low agricultural
commodity prices
on farm income.
Some of the price rises for Australia's important
commodities, for example, signal international
pressure on steel prices and non-oil energy costs, and therefore a range of other prices.
But no sooner had China's industrial base started to show some positive effects from the pickup in global
commodity prices — which has allowed its factories to push through some price increases after many years of producer price deflation — than several of the industrial materials most reliant
on Chinese demand started to come under
pressure during April.
The US Dollar in overnight trading has made a strong move up and that is putting
pressure on stocks and
commodities.
A broad selloff in
commodities and dollar strength point to disinflationary
pressures on the horizon that weaken the argument for a near - term rise in U.S. interest rates, according to some analysts.
The global pick - up in demand and activity has generated strong upward
pressure on a range of
commodity prices over recent months, notably for oil, gold, base metals and a number of rural
commodities.
A few dollar - denominated
commodities moved higher
on Friday in response to a weaker U.S. Dollar, a drop in U.S. Treasury yields and softer - than - expected U.S. economic data.The dollar was
pressured against a basket of currencies after the initial reading
on first - quarter gross domestic product came in at 2.3 percent.
A short squeeze is a situation in which a heavily shorted stock or
commodity moves sharply higher, forcing more short sellers to close out their short positions and adding to the upward
pressure on the stock.
What did the revolts brought to the people in those countries any thing other than continuos unending revolts and demonstrations scarcity of essential
commodities and products adding to the sky high prices... While other essential needs such as electricity power supply, water, gas, diesel, petrol are being used as a
pressure tool by the opposition or the ruling party to keep people mad
on the streets rather than going home seeing to their daily living making and minding their own businesses... but what business will continue with such chaos and disorder...?
Barden said that input costs are rising
on everything from
commodities to labour to energy, and the six years of retail price deflation and rising labour costs the industries had undergone «continues to cut margins, placing the sector under increasing
pressure».
Some
pressure is still expected to build
on global
commodity prices in this year's second quarter, in line with the northern hemisphere milk peak, Rabobank's latest dairy quarterly says.
«I'm not blind to what's happening
on world and EU
commodity markets and am well aware of the
pressure being exerted
on the cheese market by lower priced, lower quality imports,» stated Jones.
Dairy products are New Zealand's largest
commodity export and lower global prices are putting
pressure on the nation's dairy farmers, weighing
on the outlook for economic growth and putting dairy sector debt
on the Reserve Bank's radar as a growing risk to financial stability.
The decision reflects the increasing
pressure on dairy processors to look to new markets and higher value production to offset increasing
commodity costs.
A lesser increase in prices of energy and
commodities compared with 2006 will ease the
pressure on processors, according to a new report by Standard and Poor's.
The 2014 GE Capital Australian Mid-Market Report released last week revealed rising
commodity and labor costs,
pressure on margins and the increasing threat from private labels were some of the biggest challenges facing the industry.
Niederhoffer — the only player to wrest the North American Open title from Khan in the»70s, which he accomplished in 1975 — thinks there are similarities between playing squash and dealing
on the
commodities market: the
pressure, the necessity for making quick decisions, the elbowing for position.
There have been reports that, for premature infants, breast milk may be seen by staff as a
commodity, leading to
pressure from neonatal intensive care unit (NICU) staff
on mothers to express milk (Flacking 2006), with the consequence that breast milk feeding may be favoured over breastfeeding (Niela - Vilén 2014).
Russian sanctions over Ukraine have put
pressure on the economy, while elections in Brazil and lower
commodity prices have hurt that country.