March 2019

<strong>Most Commodity Signs Point to Rally, With Crude Oil a Key Risk</strong> (Bloomberg Intelligence) -- Broad commodities are on sound footings at a bull-market discount, with dissipating trade tensions and a peaking dollar supporting price gains, in our view. Limited crude upside in a fundamentally bearish oil backdrop is a primary risk, but metals and agriculture should take the bull-market baton in a weak-dollar environment where 2018 panned out as a last gasp for the greenback. Expectations for Federal Reserve interest-rate hikes have switched to easing, leaving U.S. vs. global stocks' outperformance as a final dollar pillar. Key macroeconomic commodity companions -- emerging-market equities and China's purchasing managers' index -- are positive. Metals should benefit from a peak dollar and warm up with palladium. In agriculture, we think it'd take record U.S. grain yields and/or a weak Brazilian real to prevent a rally.