What is your perspective on the commodity markets? There is a sharp rally, a reversal after a long time. What is the sense you get? Is it only linked to the dollar index or is there much more to it?
A couple of things. They are probably playing a little bit of catch up. This is the first part and they were very suppressed as far as price is concerned. The US dollar going back to 109 from 116 has given up a lot of that high energy and maybe we are having a breather on the dollar.
I am still waiting to see what happens with the midterms in the US and where J Powell plays. So I am not suggesting that the heady days are over for the dollar. I would not be surprised to see an upward lift sometime in November for the dollar. It is still reigning supreme as king dollar. It is just very volatile across the currency complex at the moment.
What do you think about the dollar weakening? If it continues to weaken, will there be that inverse correlation or are markets pricing in that the dollar has probably topped out and that is why one should just look at commodities as they might be stable now?
Well first up how much further can the dollar go? It is at 109-108. I think there will be support and that support will be the Fed and when we go from there, I would not be surprised to see it go back to 112, 113. This is the first sign as far as the Russia situation is concerned with base metals and all the energy complexes have been strongly bid up over the last couple of days. So, it has been a nice trade on energy and every other commodity.