The commodity market

Copper is slightly lower today but in the bigger picture it frames the broad commodity rally nicely. There was a big run up into early May but it's cooled now and looks technically vulnerable.

Given the tepid US economic data lately and supply chain issues, there is less confidence of an economic boom coming out of the pandemic. You also have the US Congress seemingly stuck on infrastructure negotiations, signaling that big rebuilding plans are going to be scaled back.

However that's far from the last word on the subject. Just like the chart shows, there's some near-term uncertainty about what the next few months will look like. The bond market is signaling that the Fed can keep rates low but it's also signaling that demand won't overheat the economy.

It's a classic wait-and-see market. When there is finally some clarity though, this will be one of the first charts to move decisively.

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