00:00This kind of quarterly, cross-assetview big picture is a good place to start. Commodities are on track to have the worst month since March 2013, but are still on track to make a fifth grade quarterly gain. What's next in the quarter? Is it really necessary to continue talking about the super softone? Who are the biggest losers in the future? This is a great question. There's more than one way commodities can be wrong. Precious metals and platinum group metals have been under significant pressure, especially with the stronger dollar. Oil oil and natural gas prices in the US have risen a lot. This is due to fundamental demand returns. It's been more mixed for industrial metals. Chinese regulations that take some of the speculative froth out of the market and add some metals markets to it are putting pressure on copper prices. Then you look at a woman, and it is very common to see a lot of women. We also look at the prices of ferrous scrap and steel. These are both up quite a bit. Even eggs, even though some of them are about grains, we have seen some movement up in recent months. They are still quite low compared to the beginning of the year. It's not just one commodity that is driving it. The dollar's strength is weighing on the precious side. However, the fundamental oil demand is really increasing there and some industrial metals were still up this month. We're going see continued manufacturing strength supportingindustrial Metals and an additional upside here for oildemand very fundamental. The dollar might also see an increase in value in the coming year. This could be a positive for precious metals. There is much talk about the heat dome, but also concern about what it means for natural gas. That's right. This chart shows the pressure natural gas futures are under. The U.S. heatwave is causing a surge to the upside. Many people believe this will lead to a rally that is larger than expected. This is especially true when we consider the effects of extreme weather and climate on commodity prices and production. While that may be a longer-term issue, there are three major factors driving the natural gas price. One is the fact that the price is currently being driven by the winter strip. The previous winter's weather also has an impact on the winterstrip. This winter was particularly cold, as you may recall that there was a massive freeze. The coldest weather in American history was recorded in Texas, where I live. This really caused some natural gas inventories to shrink, causing an inventory deficit. The deficit has increased year over year and five years on average. We are now down in inventories. People fear that the next winter could be as cold as previous winters. As you mentioned, we now have hot weather and high demand. All of this is against the backdrop of your observation that there might be more natural gas demand for electricity going forward, as the US tries to move away from coal. The baseload is an administrative goal to try and reduce the carbon footprint and replace it with natural gas. However, I believe there is a lot of upside to natgas herethrough the end-of the year. That could keep pressure on next year as the US tries to push further away from coal. This is far worse than the expected contraction of 21%. This was the Sovietsurvey consensus. This is an increase of 22 percent in industrial reductions year over year. It was also a paltry 27 percent. Sherri, these are also the May preliminary preliminary numbers. It's not surprising considering that we also saw a miss in the South Korean numbers. This was due to some contraction rather than an expansion we expected. As we continue to see factory output numbers that are a bit lower than we expected, Jason. What is the outlook for metals productions and metals prices? This is especially true when there are both potential Fed tightening quicker and more China-imposed measures to slow down the commodities rally. The most important data is still to come out this week, I believe. All three purchasing manager indices, the Chinese station manufacturingPMI, the final eurozone manufacturing PMI and US ISE Manufacturing Index are likely to see expansions. These PMI surveys are likely to continue showing growth for the coming year. This is expected to be supportive and positive for industrial metals demand. Since the pandemic, physical goods demand has been strong and will continue to be strong. Even though Japan's PMI ISE numbers are lower than expected, we still see some weakness. We're hoping to increase those numbers this week. Because global manufacturing is on fire, this will likely be supported for metals demand. Is it possible to add more restrictions in China when it comesto output? We have the centennial celebrations this week, but there are also wider climate concerns. I believe that we might see some of these regulations have an effect on copper, for example. These sorts of things could impact prices, but the actual demand is coming from the global economy. Interest rates are still very low even though we have exceeded the maximum shared accommodation. That's right. We've seen increases in interest rates where we have. The interest rate on excess reserves is very low and very modest. However, expectations of morerate ISE stated that money will remain cheap for a time and that the Fed won't move fast. The Fed's ability to make money cheaply is not supported by other central banks. For industrial metals, strong forbidding demand should also be strong. Jason should not be afraid so quickly. This week's OPEC+ meeting. What are your expectations? Well, I believe they will reduce production cuts. In other words, they will allow more production to reach the global market. It wouldn't surprise me if they produced half a million barrels. There could be more. The truth is that oil demand is rising. People are returning to travel. People are returning to the commute. Consumption is rising. If people return to work, more production will be available on the global market. It is reasonable to do so.
