With the notable exception of the impact of the dry weather in the US on grain markets, macroeconomic and financial factors continued to drag commodity prices lower in the second quarter. The consensus view is that fears about the global backdrop are overdone and that prices will now rebound strongly as the euro-zone crisis fades and additional policy stimulus takes effect. However, we continue to expect the problems in Europe to escalate, with one or more smaller countries leaving the single currency altogether. What’s more, while extra global policy support should mean that commodity demand is higher than it would otherwise have been, it will still be sluggish, maintaining the downward pressure on prices.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services