This is an interesting report by RBC. Despite being slaughtered mid-year, fundies are still quietly accumulating commodity holdings. This is not all that surprising given the inflation outlook remains firmer than we have experienced for a number of cycles. There are also the super-cycle arguments about ESG, climate change mitigation etc. to keep fundies buying.
I remain skeptical of both arguments but not hostile to them. The biggest issue for ongoing demand China going ex-growth which will swamp the world with supply.
For now, the overriding concern is still the end-of-cycle shock and, as commodity and mining company prices fall ahead, I would be a buyer just on the cyclical factors of a rebounding cycle and falling DXY.
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