G3 Recap 6-27-11

Main Items:

  • Core PCE rose 1.2% YoY in May vs 1.1% exp and 1.0% prev.
  • US Personal income rose 0.3% MoM in May vs 0.4% exp and prev. Personal Spending was flat vs 0.1% exp and 0.4% prev.
  • Dallas Fed Manufacturing Activity dropped to -17.5 in Jun vs -3.2 exp and -7.4 prev.



  • “There’s no device known to mankind that will prevent people from being idiots” – BBG article on network security

2 thoughts on “G3 Recap 6-27-11

  1. My humble view on China: Premier Wen’s headline comment/editorial in the FT on inflation is significant in that it tells me that China in 2dH -’11 will step on the accelerator and not on the brake (as they have done in 1H-’11).

    The consequence of this for hard commodities is clearly bullish and we will see copper going to 10,000 again and make new all time hi’s , crude will cruise to 130+ (Brent) and 115 (wti) . The IEA release has no impact ( note: 60 mio barrels is about 16 hours of global oil demand ) and could even mean tighter OECD stocks going
    into winter season while the ‘Arab Spring’ has not fully played out yet , keeping a M.East political premium in the crude price.

    We’ll see a decoupling then of the high US$/commodity correlation with the supply/demand picture becoming
    more of a price driver. A stronger $ will have impact on hard commods but not in the same magnitude we have seen in recent past.

  2. You’re probably right about China, but I need to see some more data before assessing the impact on commodities. Longer term, those price targets seem pretty reasonable – I’m just not sure about the timing yet.

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