Commodity risks and China’s growth sustainability in 2021

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

From Inflation to Weather, Challenges for Commodities

• Gold market to monitor potential for inflation pressure in 2021.
• Copper prices likely to hinge on Chinese, global economic growth.
• Oil will track for signs of recovery in demand as US shale output tightens.
• Soybeans face La Niña threat that could cause drought in South America.

China Still the Engine of Global Growth?

• A K-shaped growth in China might reflect sector disparities.
• Industrial sector is booming but services sector might be slack.
• Big increase in debt-to-GDP ratio could signal lackluster growth.
• Pace of China’s growth often impacts commodities, currencies.