MACQUARIE: Everyone hates commodities

Business Insider Australia  – Commodities have no friends at the moment. From energy to softs to base and precious metals, prices have been hammered almost unilaterally across the board, weighed down by a combination of a strengthening US dollar, increased supply, tepid demand and, as a consequence, mounting disinflationary pressures. The paragraph below, from Macquarie Bank’s commodity analyst team, is reflective of the broader investor mood when it comes to commodity markets – they hate them. The world simply hates commodities at the moment. Prices keep on falling, producers are in a battle for survival and, more worryingly, demand isn’t reacting that positively as of yet. They are providing a catalyst for currency volatility, causing headaches for many emerging market governments and leading to wider concerns around systemic financial risk. This is particularly true as deflationary pressure intensifies which in turn drives business caution and amplifies the fundamental problems pervading commodity markets. We remain in the wrong type of global economy for commodity prices to perform well. According to Macquarie, there is only one thing that can break the current cycle of ever-lower commodity prices. Unfortunately for those hoping that 2016 will herald a year of accelerating global growth, they

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