Commodity Markets Overview
Commodity markets are an important part of the global economy, providing essential raw materials for industry and agriculture. Prices of commodities such as oil, metals, and agricultural products can have a significant impact on the cost of goods and services, and can be a key indicator of economic health. This week, we take a look at five key charts that provide insight into the current state of global commodity markets.
Oil Prices
Oil prices have been volatile in recent months, with the price of Brent crude oil rising from a low of $40 per barrel in April to a high of $70 in June. The recent rally has been driven by a combination of factors, including increased demand from China, a weaker US dollar, and production cuts by OPEC and its allies.
The chart below shows the price of Brent crude oil over the past year. The price has been trending higher since April, and is currently trading near its highest level since October 2018.
Metals Prices
Metals prices have also been on the rise in recent months, with the Bloomberg Commodity Index rising to its highest level since 2014. The rally has been driven by strong demand from China, as well as a weaker US dollar.
The chart below shows the Bloomberg Commodity Index over the past year. The index has been trending higher since April, and is currently trading near its highest level since 2014.
Agricultural Prices
Agricultural prices have also been on the rise in recent months, with the Bloomberg Agriculture Subindex rising to its highest level since 2014. The rally has been driven by strong demand from China, as well as a weaker US dollar.
The chart below shows the Bloomberg Agriculture Subindex over the past year. The index has been trending higher since April, and is currently trading near its highest level since 2014.
Currency Markets
Currency markets have also been volatile in recent months, with the US dollar weakening against a basket of major currencies. The US dollar index, which measures the value of the US dollar against a basket of major currencies, has fallen from a high of 103 in April to a low of 97 in June.
The chart below shows the US dollar index over the past year. The index has been trending lower since April, and is currently trading near its lowest level since April 2018.
Interest Rates
Interest rates have also been volatile in recent months, with the US Federal Reserve cutting rates to near zero in response to the economic impact of the coronavirus pandemic. The chart below shows the US Federal Funds Rate over the past year. The rate has been trending lower since March, and is currently trading near its lowest level since December 2008.
Conclusion
The five key charts discussed above provide insight into the current state of global commodity markets. Oil prices have been volatile in recent months, with the price of Brent crude oil rising from a low of $40 per barrel in April to a high of $70 in June. Metals prices have also been on the rise, with the Bloomberg Commodity Index rising to its highest level since 2014. Agricultural prices have also been on the rise, with the Bloomberg Agriculture Subindex rising to its highest level since 2014. Currency markets have also been volatile, with the US dollar weakening against a basket of major currencies. Finally, interest rates have been trending lower, with the US Federal Reserve cutting rates to near zero in response to the economic impact of the coronavirus pandemic.