Weekly commodity wrap-up

The ties that bind

Chinese President Xi Jinping is wrapping up his first visit to the U.S. in six years in what has been described as a productive week for U.S.-Chinese relations. President Xi and President Biden met in San Franciso both privately and publicly while attending the Asia Pacific Economic Cooperation annual summit.

The meeting results are open to interpretation, but both the U.S. and China came away with a message of wanting friendship, not war between the two nations. Tensions have been high between the two due to increasingly isolating policies that only got worse during COVID.

There has been plenty of the blame game played already as to who’s at fault for the current relations, but this week’s meeting offered a calming message of moving forward.

There are still clear differences, the U.S. has made it clear it  will defend Taiwan in a hostile takeover scenario, and China will not be satisfied until Taiwan is a part of China. The U.S. also has taken no steps toward lifting tariff hikes or export controls that were established under the Trump administration.

As the two super economic powers of the world, it would be nearly impossible to untangle the economic ties that bind them together. But abuse of the relationship will not be tolerated either, and acknowledging differences while trying to establish a clearer set of ground rules for behavior going forward is progress.

Inflation rates slow as equities lift

The consumer price index was flat in October from the previous month but still up 3.2% from a year ago. The flat month-on-month movement was below expectations and markets were giddy with excitement after the report. Both the Dow and the S&P saw prices rally 1.4% or more in total price on the day of the news while the U.S. dollar index decreased by 1.5% on the same day.

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Opinions are solely the writer’s. Derrick Hermesch is a commodity futures broker with Pinion. He can be reached at 785-338-9605. This is not a solicitation of any order to buy or sell nor does it provide any recommendations in regard to the market. Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures and options trading involve substantial risk of loss and is not suitable for all investors.