Opening Statement from the September 2018 CCPM Forecaster 

Opening Statement from the September 2018 CCPM Forecaster 

Originally published on September 2, 2018 

Overview

The global economy continues to show some signs of weakness as a result of trade uncertainty, but remains on solid ground. From a longer term standpoint we to believe the greatest risks to global economic growth stem from China.

The commodities selloff progressed through the midpoint of August before retracing as the US dollar declined. Notably, during August price changes for most commodities were driven primarily by price movements in the US dollar.

China

Trade tensions between Washington and Beijing are adding further strain on China’s economic growth picture, which already faces credit growth constraints during a critical period as it seeks to transition from an export-based manufacturing economy to a service economy based on primarily domestic consumption. Even though the Chinese stock market has made an impressive rebound since bottoming in May, it took a considerable selloff in the US dollar to halt the collapse in the yuan.

USD

Although the US dollar sold off after reaching a high of 97, we believe this high will be tested in coming weeks. Looking ahead, resolution of current trade disagreements between the US...