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Sancho Panza

Commodities Extend Decline To Lowest Since ’09 On China Slowdown

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Bloomberg 15/9/14

'Commodities fell to the lowest level in more than five years on signs demand growth is weakening in China, the biggest consumer of energy and metals, and on speculation U.S. borrowing costs may rise next year.

The Bloomberg Commodity Index of 22 futures dropped as much as 0.4 percent to 120.8102, the lowest since July 2009, before trading at 120.9682 at 9:44 a.m. in London. The gauge has lost 3.8 percent in 2014 and is set for a fourth year of decline. Brent crude fell to the lowest close in more than two years as corn and soybeans traded near 2010 lows.

Chinaâs economy will expand 7.2 percent this year from an earlier estimate of 7.6 percent, according to Royal Bank of Scotland Group Plc. Industrial output growth in August was the weakest since the global financial crisis, data showed at the weekend. The Federal Reserve starts a two-day meeting tomorrow where it will consider the timing of rate increases after its bond-buying program ends this year. The Bloomberg Dollar Index rose 1.2 percent last week on speculation rates will rise.

“China is a challenge at the moment,” Dominic Schnider, head of commodity research at UBS AG’s wealth management unit in Singapore, said by phone today. “The dollar is going to be on the strong side and that’s a burden to commodities.”

Brent for October settlement, which expires today, fell as much as 0.9 percent to $96.21 a barrel, the lowest since July 2012, on the London-based ICE Futures Europe exchange before trading at $96.80.

Corn for December delivery fell as much as 0.8 percent to $3.3575 a bushel on the Chicago Board of Trade, matching the lowest level for the most-active contract since 2010, before trading at $3.36. Soybeans for November dropped as much as 1.1 percent to $9.7425 before trading at $9.81.'

China needs to QE and get prices rising quickly, for all our sakes.If we can just get some inflation in the system,then aggregate demand will pick up,then we'll all be saved.Rant over.

Edited by Sancho Panza

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China needs to QE and get prices rising quickly, for all our sakes.If we can just get some inflation in the system,then aggregate demand will pick up,then we'll all be saved.Rant over.

If China gets wider inflation we'll be worse off, imo. China will use its reserve to help see the world through the crash, including their own HPC. Lot of VI need to go down, replaced by fresh lending on much lower house prices.

Global banks retreat as the US and China tighten in lockstep

The glory days of "maximum liquidity" we have enjoyed in the post-Lehman era are coming to an end, warns Bank of America

12 Sep 2014

[..]China's own variant of global QE is slowing to a halt. The central bank was still buying foreign assets at a pace of $40bn a month in the first quarter, mostly US and EMU bonds. This has stopped since Li Keqiang said in May that the country's $4 trillion reserves had become a "burden", stoking inflation.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11093618/Global-banks-retreat-as-the-US-and-China-tighten-in-lockstep.html

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