16/03/2016 - 05:59

Opinion: Citigroup Advises That The Recent “Uptick” In Commodities Isn’t Justified… Really?

16/03/2016 - 05:59


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Just when we thought that global markets are starting to stabilise, Citigroup has to come out and ruin the party… US Stocks held up well overnight, even with Citigroup’s remarks… But is the recent rally unjustified? It all comes down to the US dollar…

Opinion: Citigroup Advises That The Recent “Uptick” In Commodities Isn’t Justified… Really?

Good Morning,

Citigroup comes out saying that the recent “uptick” in commodity prices is largely unjustified…

Commodities fall….

US Stocks largely held up (Dow +3 points), as technology and biotech offset losses in the energy and commodity sectors…

"We see little that suggests the cross-industrial commodity rally is sustainable in the short term," Citigroup said in a note to investors on Tuesday.

Copper and zinc may lead a retreat in industrial commodities, analyst David Wilson wrote. Prices will moderate into the second quarter, he said.

China is poised to grow at its slowest pace in decades, as it seeks to reform a “bloated” industrial complex…….

Looser monetary policy, along with an expanded fiscal deficit pledged by Premier Li Keqiang's cabinet, are expected to help the leadership's 2016 objective of growing at 6.5 per cent to 7 per cent.

Last night, US retail sales came in largely in line at -0.1% for the month and talks of rising US interest rates is once again on the agenda…

The data, reinforced that US interest rates may in fact rise, which will lead to further falls in commodity prices…

It all comes down to the US Federal Reserve…

Yesterday in Oz, we were heavily sold off so expect a rebound today…….

The SPI is up 6 points this morning



Niv Dagan is an Executive Director of Melbourne based boutique funds management and corporate advisory firm, Peak Asset Management (www.peakassetmanagement.com.au). He is also a regular financial commentator on Sky Business.


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