As Q4 earnings continue, one theme that continues is companies mentioning supply constraints and commodity prices rising.
Simply put, inflation is back.
Commodity index CRB is one way to measure commodity prices. Here’s a brief description from Reuters:
On Wednesday, the CRB index broke out of a nearly two year range. The breakout measures to 215 or about 10% higher. We can expect prices to continue higher and possibly very quickly.
It’s also worth noting the U.S. Dollar. After providing a large tailwind to asset prices for a year, the Dollar index is approaching a major support zone.
As you can tell by glancing at the two charts, their isn’t a direct correlation between the two assets.
That said, it’ll be interesting to see if commodity prices can continue higher as the dollar bottoms. If so, it would speak to the strength of inflation pressures.
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