“The trade war impact on commodity markets will be very small, with exception of soybeans where complete rerouting of supplies is not possible,” analysts including Jeffrey Currie said in the July 4 note. “This is consistent with our economists’ view that the macroeconomic impact of the trade war is likely to be very small,” it said, with added emphasis on the final two words.
“Although commodities maintain their status as the best performing asset class in 2018, the month of June was a substantial setback driven by emerging-market demand weakness, trade war concerns and the exit of OPEC+ from supply cuts,” the bank said. “All of these concerns have been oversold. Even soybeans, the most exposed of all assets to trade wars, is now a buy.”
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
