Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. In the mids, the global economy witnessed the U. Conventional wisdom suggests the health of the U. However, import prices of consumer discretionary goods don't always move in sync with changes in the U. Instead, the connection between import prices and the U.
The commodity markets are quoted in U. Simply, a stronger U. So, a key factor to consider in anticipating how the currency will affect inflation is the behavior of commodity prices. Commodity prices are believed to be a leading indicator of inflation through two basic channels. Leading indicators often exhibit measurable economic changes before the economy as a whole does.
One theory suggests commodity prices respond quickly to general economic shocks such as increases in demand. The second is that changes in prices reflect systemic shocks , such as hurricanes which can decimate the supply of agricultural products and subsequently increase supply costs. By the time it reaches consumers, overall prices would have increased, and inflation would be realized.
The strongest case for commodity prices as a leading indicator of expected inflation is that commodities respond quickly to widespread economic shocks. In the past, increases in oil prices were behind a strong increase in the price of goods and services. However, for the latter, a previous tailwind to prices African Swine Fever is turning into a headwind, as rebounding domestic production in China works to cool domestic prices, and consequently, the torrid pace of imports seen in recent years.
Lumber is an example of where fortunes can quickly reverse in commodity markets. After reaching record highs, the commodity's price whipsawed as housing and renovation demand began to moderate. Additional supply in the U. In response, some sawmills in Canada had announced temporary curtailments. Prices have since started to creep up and remain solidly above pre-pandemic levels, though a far cry from the record levels reached earlier in the year.
We expect U. In turn, lumber prices could downshift modestly. However, a level shift in homebuilding trends in the U. This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.
The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs.
The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
Toggle navigation. Download Print Version Share this:. Highlights Following a synchronous rally in H1, the demand outlook for commodities has turned more mixed. The supply side is playing a more prominent role in driving the recent leg up in prices across some commodities. As recent months have proven, supply chain disruptions can take time to resolve. Against this backdrop, we expect a modest, but gradual downtrend in commodity prices through , though to profiles that are still solid relative to pre-pandemic levels.
An energy "supply squeeze" has upended natural gas prices. Ripple effects are being seen in oil prices. Both areas are anticipated to witness volatility and elevated prices through the winter before moderating next year on higher supply.
In a similar vein, weather-induced supply constraints are leaving their mark on agricultural commodities. North American drought conditions have markedly tightened wheat inventories. An easing in prices is predicated on supportive weather conditions in the next crop season.
Precious metals have been trading sideways since the global economy began its recovery in late Tightening monetary policy and a continued uptick in bond yields should keep a lid on prices.
Meanwhile, production constraints are putting renewed upward pressure on base metals. About CaixaBank Research. Beatriz Villafranca Serrano. September 10th, Download File. In this article. Financial stability. Hot Topics.
By August, gasoline prices were up Commodity prices can be expected to rise in a global economic recovery. But a combination of supply chain problems and a profound supply-to-demand mismatch have pushed many key commodity prices — notably energy — through the roof. There are a lot of moving parts in the global economy — some of which are still gummed up — that contribute to inflation, both here and abroad. High commodity prices for basic industrial inputs are one contributing factor.
0コメント