Putin bets commodities for biggest weekly gain since 1960

Commodities are on track for their most breathtaking weekly record rise, dating back to when Nikita Khrushchev was in the Kremlin.

loomberg’s commodity stockpile nears biggest weekly gain since at least 1960 as banks, importers and shippers shun Russian exports after Ukraine’s invasion.

Brent crude rose to nearly $120 a barrel, aluminum hit a record and wheat rose to its highest level since 2008.

Russia’s increasing isolation is stifling a key global source of energy, metals and grains, raising fears of prolonged shortages and higher global inflation.

Traders are reassessing their ties with the nation after sweeping international sanctions were imposed, and while commodities have so far escaped direct penalties, caution prevails as Moscow is fast becoming a commercial pariah.

“We have never seen such steep and sudden increases in commodity prices across so many assets,” said Henning Gloystein, an analyst at Eurasia Group. “Until there is a significant de-escalation, record or elevated prices due to sanctions and disrupted supply chains for many commodities will persist.”

The BCOM Spot Index, which is only updated at the end of each global session, was up 8.6 percent this week through the end of Wednesday. It has likely already eclipsed the 9.7 percent jump seen in September 1974 – at the end of the oil crisis at the time – and will set a new record unless there is a dramatic reversal on Friday.

Russia’s attack will rock international relations and reshape the economies of western Europe, Fed Chair Jerome Powell told lawmakers on Wednesday.

A veteran agricultural economist, Scott Irwin of the University of Illinois, said he expects “the biggest shock to global grain markets” of his life.

The fallout from the war in Ukraine represents a dangerous new phase for the global economy, complicating central bank efforts to rein in accelerating inflation. OPEC+’s decision to leave its production plans unchanged increases these risks as the rise in oil spreads to other markets.

“Commodities have typically performed well late in the business cycle — and during periods of global turmoil — and offer a potential hedge against inflation and disruption,” portfolio managers Greg Sharenow and Andrew DeWitt of Pacific Investment Management Co. wrote in a blog post.

https://www.independent.ie/business/world/putin-sets-commodities-up-for-biggest-weekly-gain-since-1960-41406263.html Putin bets commodities for biggest weekly gain since 1960

Fry Electronics Team

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