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资金疯狂流入大宗商品 千万不要和美联储对着干

The crazy flow of money into commodities should never go against the Federal Reserve.

金十數據 ·  May 11, 2021 12:45

Original title: money flows into commodities crazily, do not fight against the Federal Reserve

Recently, inflation has been a major concern for many investors. Commodities and inflation became hot topics at Buffett's Berkshire Hathaway (Berkshire Hathaway) 's annual shareholders' meeting over the weekend.

Buffett spoke of rising inflationary pressures, suggesting that many of Berkshire's businesses have been affected by inflation. Buffett explained: "We are raising prices, and at the same time we also accept price increases in the market."

He went on to say that soaring input costs and raw materials were being passed on to consumers because of loose monetary and fiscal policies. "people have money in their pockets, but at the same time they are paying higher prices," he said. These remarks fully prove that:Financial markets are recovering on the back of historic fiscal stimulus and central bank easing, and investors have good reason to worry about inflation.

The Fed has made it clear that it wants inflation to stay above 2 per cent for some time to reach a "long-term" average of 2 per cent, and it appears to be getting the results it wants.

This is not surprising given the Fed's strong influence on the market. Therefore, investors should adapt to this trend.

The Fed hopes to achieve this long-term average inflation rate of 2% through higher oil and commodity prices.As a result, commodity markets will continue to benefit, with commodities up between 19 and 27 per cent this year.

Inflows into commodity indices rose sharply last week as institutional investors made a big return to commodities.In the past five trading days alone, there have been inflows of about $1 billion, with total inflows this year firmly above $8 billion.

The 10-day average inflow is now stable at more than $100 million a day, a level not seen since March. In additionThe trend of money into commodity index funds is likely to continue in the coming year as institutional investors are eager to add inflation hedges to their portfolios.

Rising commodity prices are often a key driver of inflation itself. As a result, commodity-related investments are naturally widely seen as inflation hedges. In periods of high inflation in history, this asset class has indeed performed well.

The huge inflows into commodities suggest that investors in different asset classes are undergoing a strategic rotation.On the one hand, they seek to increase their exposure to commodities, while on the other hand, they may continue to reduce their positions in other assets.

The increase in investors' exposure to commodities is evident, and a look at ETF, the most actively traded commodity index this year, shows that money has poured into the commodity index ETF, except in late March and early April, when the dollar rose sharply, temporarily easing the situation.

Since then, the dollar has resumed its downward trend and capital inflows continue to accelerate into commodities. Given the funding space left over over the past five to seven years and the current loose financial environment, the market is still in the early or middle stages of a strategic rotation back to commodity markets.

In addition, CTA funds are also buying a lot of oil futures under the bullish momentum. Unless there is an event that could trigger a liquidation or a surge in the dollar, speculators will remain extremely interested in oil futures. In short, given the Fed's willingness to let inflation "heat up" in the short term, and investor demand for oil futures is likely to remain strong, there is good reason to remain bullish on oil futures in the future.

With the summer peak of demand approaching and the reopening of major cities and regions, oil prices will face upward risks. In addition, investor interest in commodities will be more sustained this year and is related to the ongoing strategic rotation across asset classes.

If OPEC + is limited in restoring supply to the market, these investors will still have an advantage in the market because of the strong inflows of these funds. While potential downside risks remain, such as a sharp decline in US jobs data or an outbreak in India, investors still have no reason to fight the Fed.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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