Macro Insights Weekly - What to make of the commodity cycle?

A soft patch in commodities helped the global disinflation trend in 2023. But as demand remains resilient, commodities may well have bottomed. This could complicate the inflation picture ahead.
China’s demand weakness contributed to the softness in energy and metals prices last year.
US-led supply side response certainly tempered energy prices.
But markets appear buoyed by a likely recovery in Chinese demand.
Additional boost to global commodity supply looks unlikely this year.
While a price surge is unlikely, a commodity turnaround could end the ongoing disinflation trend.