Commodities And The Yield Curve
Chris Kimble | Aug 14, 2019 03:56PM ET
The big news of the day seems to be the inversion of the yield curve. An inversion oftentimes suggests that the economy will be slowing in the future and recession odds increase.
Another important economic message looks to be coming from the Thomson Reuters Equal Weighted Commodity Index!.
This chart looks at this important commodities index over the past 20 years. Since the highs in 2011, commodities have remained inside of falling channel (1).
It has traded mostly sideways over the past 3 years inside of the blue shaded rectangle.
This month, commodities are attempting to break below the 3-year trading range at (2).
A decline in commodities, TIP/TLT, copper:gold ratios and the inversion of the yield curve, increase the odds that dis-inflation/deflation is about to present challenges in the global market place.
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