The fifth commodity supercycle has begun, says JPMorgan strategist


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A new commodity ‘supercycle’ has begun, according to Marko Kolanovic, the highly regarded quantitative analyst at JPMorgan. The rally in commodities, and the CL.1 movement of oil, -0.73% in particular, has started, and will be driven by post-pandemic recovery, ultra-lexic monetary and fiscal policies, a weak DXY dollar, -0, 01%, stronger inflation, as well as the impact of environmental policies on supply and demand.

“We believe the tide in yields and inflation is turning, which will pose a significant risk to multi-pool portfolios,” he added.

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Source: JPMorgan

This will be the fifth so-called supercycle in the past 100 years, after the one that began in 1996 and peaked in 2008, he said. Like the latter, financial flows can exacerbate movements in commodities, he added. Brent BRN00 crude oil futures, -0.81%, have risen for nine consecutive sessions, the longest winning streak since January 10, 2019, and have soared 218% from April 2020 lows. Futures copper HG00, + 0.23% settled on Wednesday. at its highest level since October 5, 2012.