Commodity costs have soared to a staggering start to the month, with their largest back-to-back weekly increases since 1960. Twenty-seven commodities, ranging from metals to energy to agriculture, have recorded spectacular double-digit single-day gains this quarter, outperforming every asset class. Commodities are commonly experiencing 10% or more in back-to-back gains virtually every week, which we have never seen before. This is contributing to an era of unprecedented wealth creation.
After the stronger-than-expected CPI numbers were released, the Fed may have gotten some air last week. This signals that October might be the start of a two-year deflationary trend. The supersize rate hikes are likely now in perspective, according to the headline CPI, which rose less than expected. Expectations of a possible Fed “pivot” away from aggressive interest rate increases will be boosted or dampened this week depending on the outcome of the highly anticipated PPI reading. The UK Autumn Statement will be the topic of conversation this week. It is set to be a major market-moving event, with traders not likely to want to miss it after the disastrous “mini-budget” in September, which prompted The Bank of England to revert to unprecedented “Quantitative Easing” measures.
Let’s Talk Numbers – Prices
Benchmark U.S. crude oil delivery of December declined $3.09 to $85.87 a barrel on Monday. Brent crude oil for January delivery dropped to $93.14 per barrel from $94.19 in December. Wholesale gasoline for December delivery dropped 8 cents to $2.53 per gallon. December heating oil decreased by 2 cents to $3.54. Natural gas per 1,000 cubic feet increased by 5 cents to $5.93. Same delivery gold climbed to $1,776.90 per ounce. Silver increased 44 cents to $22.11 per ounce, while December delivery copper declined 8 cents to $3.83 per pound.
Traders switch their attention to U.S Producer Price Inflation data and the UK Autumn Statement. They may signal further colossal moves ahead. At this point, it seems like we are in the midst of one of the greatest periods of wealth creation the world has ever witnessed.