After falling notably since last April, raw industrial prices are on the move higher in response to China’s reopening, as they should. I’m actually surprised how sanguine many are on commodity prices in the face of the 2nd biggest economy finally joining the rest of the economic world in no longer locking down. As of yesterday’s close the CRB raw industrials index is at the highest level in 2 months. Copper today is quietly rising almost 1% to the highest since June. The same for iron ore whose current price was last seen in June.
Inflation trends are certainly softening overall but I’ll argue again how important the China full reopening is to the global economy and the rise in commodity prices, including oil and gas, we’ll now see after the pullback.
CRB RIND
Copper
Iron Ore
We’re seeing a rally in European bonds that is resulting in lower yields in the US but ECB governing council member Robert Holzmann is telling us today what he’s really focused on. “As long as core inflation isn’t peaking, the change in headline inflation won’t make a change in our determination.” All of a sudden, the euro is at a 7 month high vs the US dollar. And gold too is at a 7 month high, acting great.
Euro
Gold
After rising by 16 bps in the week ending Dec 30th, the average 30 yr mortgage rate fell by a like amount in the following week to 6.42%. With very little activity in the last 2 weeks of the year, refi’s rose 5.1% w/o/w but are still down 44% y/o/y. Purchases were lower by .5% w/o/w to the lowest since 2015 and down now 44% y/o/y.
Purchases
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.