Commodities Rally Pauses As All Eyes Turn To Inflation Data – What’s Next?

Yellen’s comments come after Friday’s U.S Employment data, showed Non-Farm Payrolls fell short of expectations for the second straight month.

In the first five months of the year, the U.S economy added 2.1 million jobs, which leaves over 7.6 million Americans still out of work. Friday’s data supports the case that the Fed will continue to maintain its ultra-loose monetary policy for as long as it takes the economy to reach maximum employment.

Trader’s attention has now shifted to U.S CPI Inflation data, which will take centre stage this week – especially after April’s CPI reading showed the largest monthly gain in core inflation since 2008 with CPI jumping a sizzling 4.2% from a year earlier.

Federal Reserve officials have continued to state that inflation will run hotter than its traditional 2% goal for a longer period than estimated as the global economy reopens, but should prove temporary. However traders are unconvinced and are questioning whether the Fed has unleashed a beast that they can no longer control.

One of the key indicators of rising inflation – is higher oil prices. Last week Oil prices rocketed to their highest since October 2018 with WTI hitting $70 a barrel, while Brent traded above $72 a barrel.

Elsewhere, many other commodities ranging from Copper, Palladium, Iron Ore to Lumber prices surged past all-time record highs in recent weeks – And this could just be the beginning!

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: