Global merchandise has collapsed more than 20% of the same period last year, according to the S&PI Basic Products Index.
Jung Getty | Moment | Getty images
The world prices of the basic products are beating, since the commercial war tensions once again be crouched between the two largest economies in the world, and the recession signs are red.
The S&P GSCI index, which tracks world products in the energy, metal and agriculture sectors, shows that prices have decreased around 8% since April 2, when the president of the United States, Donald Trump, announced a large number of “reciprocal” tariffs. That was despite the slight recovery in prices after the White House leader announced a tariff turn on Wednesday.
However, Trump has never increased heat in China by walking through the rate of Chinese products to 125%.
“Basic products collapse [prices] It is a circuit switch, a sign that a global recession is disabled, “said Marko Papic, a macro and geopolitical expert in BCA Research.
China is the largest consumer of basic products, and it is likely that Hhan’s most anticipated tariffs are probably a ballast not only in the growth of the country, but also in its consumption of certain products, in particular energy and industrial metals.
Or all basic products in the basket, the energy was reduced more since April 2, decreasing around 12%, according to the GSCI Energy Meter of S&P Global.
Industrial Metals recorded the second most pronounced loss of around 9%, followed by soft products, which fell approximately 5.2%, according to Global S&S.
As for oil, the broader negative feeling also coincided with the recent decision of the OPEC+to accelerate the rhythm of group production. OPEC+ accelerated the rhythm of the walks, but the increases had previously decided. Petroleum prices are still at a minimum of several years despite the light rebound after the Trump tariff, with Global Benchmark Brent about $ 64.78 per barrel and the intermediate of the United States in Texas in Texas at $ 61.77 per barrel. Oil prices are sensitive to commercial escalation, given the state of China as the largest crude importer and the fact that raw products are called in US dollar.
Goldman Sachs reduced its oil prices forecast for both raw reference points to $ 62 per barrel for Brent and $ 58 per barrel for WTI by the end of the year.
Assembly of global recession fears
The expectations of higher decreases in basic products prices are feeding a growing choir or recession calls from the United States. JPMorgan hopes that the Gross Domestic Product of the United States will contract 0.3% this year, after a robust year for growth.
“The lowest lower movement we have seen in crude oil since April 2 suggests that the market has a price in greater probabilities of a recession,” Ing products said.
“The prices of the basic products are bees by the bee by rapidly deteriorating the feeling as they are mounted in the global recession in the midst of trade and geopolitical tensions,” said Sabrin Chowdhury, head of basic products at Fitch Solutions, the BMI Research Unit. He added that the probability that the United States will fall into the recession is now more than 50%.
Industrial metals also continue suffer as commercial tensions and recession fears compounding with the perspective of the Immaculate Sector of Continental China, he added.
Copper in particular is a main indicator of economic health, given its use in many sectors. While copper futures in New York recovered on Wednesday, they currently quote $ 8,380 per ton at the NYMEX, marking a 16% decrease since April 2, according to FACTSET data.
It is likely that metal markets remain pressured as China, the world’s largest consumer in the world, are increasingly highlighted.
“With a growth in the United States that probably decreases the back of tariffs and China that is already struggling to revive its economy, it is likely that the demand for copper and other industrial metals wake up,” said Ewa Manthey, strategist of basic products in ing.
Similarly, Goldman Sachs reduced his copper pricing prognosis, citing a surplus of metal and his prognosis or a stagnant economy of the United States.
“We expect a blow to the ex -China demand for Waker’s GDP growth, as well as a lower 2024 base for China’s demand than the prognosis previously,” the investment bank wrote in a note.
In the case of a recession of the United States, Goldman Sachs predicts that copper prices could further fall to the minimums observed in the commercial war in Trump’s first mandate and the Covid-19 pandemic, at $ 6,500 and $ 5,900 per ton, respectively.
