Commodity rally comes down

The recent commodity rally comes down to two factors: a weaker dollar and hopes of an economic rebound, Morgan Stanley says. “If one sees green shoots, one should be long commodities. If one sees future inflationary pressures resulting from excessive fiscal and monetary activism, one should be long commodities. If one sees weakening confidence in the US dollar and the difficulty of US policymakers to sufficiently stimulate the economy without further risk to the dollar, one should be long commodities,” the bank’s commodity researchers say. No surprise that they conclude a slowing in the greenback’s decline is the “biggest near-term risk to commodity prices.”