Prices for industrial metals benefited from diminishing economic fears
by David Fleschen
Prices for industrial metals benefited from diminishing economic fears after US inflation came in lower than expected in July. The year-on-year rate fell from 9.1% to 8.5%, which seems to mean that the inflation peak is over. This fuelled hopes in the markets that the Fed would have to tread less heavily on the brakes by raising interest rates in order to dampen the economy and thus inflation. However, with some Fed members warning of persistent inflation risks shortly after the data release, the recovery in prices is unlikely to continue on the back of stronger economic optimism.
Source: Commerzbank Research, Photo: Fotolia