The outcome of the US elections, China’s economic recovery and the hopes around the new vaccine have sparked renewed optimism amongst investors. Most commodity prices have moved up over the past weeks, mainly because of these developments. The CRB-index rose by 4%.
ABN AMRO expects emergency-use vaccines to be rolled out to the vulnerable in the coming months, which should allow a significant lifting of restrictions during the course of next year. Subsequently the vaccines will be rolled out more broadly allowing a full return to normal in 2022.
This will trigger rapid economic growth in the US and eurozone from Q2 of next year onwards. China’s economic recovery will continue to strengthen and broaden. The positive economic trend in China will continue to underpin sentiment in many commodity markets.
During 2021, prices will also find support from the trend in the US dollar. A weaker US dollar during 2021 makes commodities cheaper for non-dollar holders and supports prices.Monthly-Commodity-Insights-November-2020.pdf (508 KB)