June 2019

<strong>Crude Oil and Copper's Primary Risks Are on Receding Macro Tide</strong> (Bloomberg Intelligence) -- The decreasing likelihood of a definitive U.S.-China trade accord, and V-shaped bottoms in crude oil and stocks, will pressure broad commodities as the macroeconomic tide recedes, in our view. Declining Treasury yields have been a leading indicator this year, continuing 4Q's risk-off trend. Commodities appear to be teetering on their last, wobbly pillar (stock-market volatility), with declining crude oil -- the greater risk, in our view -- dashing hopes. Copper and base metals are in a similar boat. Most of our indicators have turned negative, with the exception of the grains and gold -- the prime candidates for negative gamma rallies. Agriculture is getting its spark with diminished corn production and long-overdue poor weather in the Corn Belt.