Commodities have traded “heavy” for the past decade, as bond yields remain low and inflationary forces remain under wraps. But this trend could be up-ended as we head into 2021.
Today’s chart 2-pack looks at long-term “monthly” charts of the Thomson Reuters Equal Weight Commodity Index and the 10-Year US Treasury Bond Yield.
Over the past decade, commodities and bond yields have shown weakness. The Commodity Index has managed to hold its Financial Crisis lows, while bond yields have followed a falling trend line lower.
BUT something very interesting happened this year: Both bottomed and reversed higher at the same time at each (1).
This might be nothing or it could be something! The Commodity Index is now trading near 5-year highs with bond yields on the rise. Perhaps this is a sign of better days ahead.
Are commodities about the “Let The Good Times Roll?” Stay tuned!
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