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Friday, May 6, 2011

Lower Commodity Prices?

Forex Analysis This post by CalculatedRisk has been reprinted from Calculated Risk.Comments (0)

Three weeks ago there were a couple of articles in the WSJ about lower prices for steel and copper. Here is another more general article: Commodity Surprise: Some Are Now Heading Down

Cotton has pulled back 17% from the all-time record set in early March, and sugar is down 34% from its multidecade high in February. Lead and zinc have tumbled in recent weeks after shooting up in the second half of 2010. Copper has shed 6% this year.

The declines came amid a wild April in which other raw materials continued to climb. U.S. oil prices rose 7% for the month, while gold set fresh records in nominal terms 13 times and silver neared its all-time high.

Lower commodity prices would definitely help, but unfortunately the one that matters the most for the U.S. economy – oil prices – are still high (WTI futures are at $113.56 per barrel, and Brent Crude is at $125.56). High oil and gasoline prices are one of the key downside risks for the economy.

Weekend:
• Summary for Week ending April 29th
• Goldman estimates 3.5 million Excess Vacant Housing Units.
• Schedule for Week of May 1st CalculatedRisk @ May 2, 2011


View the original article here

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