Users: Dimon: 200160722_usdcny_m1china.png

200160722_usdcny_m1china.png

Chinese money supply growth rate is running to up. I think this is one of major reasons of commodity rally of this year. They are trying to boost inner demand to help their oversupply-suffering economy. They can't do it for long without FED accompany them. It hit Yuan exchange rate. If money supply growth rate start to decline or USDCNY start to rise faster than money growth rate then commodity market could crash again.  
Another major consumer of commodities is Europe. Their money supply growth rate and Euro exchange rate are declining. This is bearish for commodities.  
Starting this month FED is seizing dollars from markets through new debt issuance, this is also bearish to commodities and bullish to USD. It hit Yuan and Euro to USD exchange rates. 

Who will win this big battle? China as source of stability in commodity markets or FED and Europe as source of instability?

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