The coming peak in USD and low in commodities

Peaks in the USD/AUD have corresponded with troughs in the CRB Index (give or take 1-3 months)

Keep in mind that the Commodity Research Bureau (CRB) Index calculates the pricing of a basket of 19 commodities with energy contracts comprising nearly 40% of the weighting.

In my recent writings and observations, the energy complex is the last holdout in the current mean reversion in commodity prices.

This and the markets are currently telling me……

1) the USD strength is closing in on a peak, while allowing for one more surge higher (read: probability that AUD sympathetically moves a little lower too)

and

2) I expect energy prices to have one more lower leg or wave (RBOB Gasoline has nearly completed its)

So, I am preparing for another moment where this peak and trough synchronise.

September 8, 2022

by Rob Zdravevski

rob@karriasset.com.au