{"id":2973,"date":"2010-06-01T15:27:35","date_gmt":"2010-06-01T15:27:35","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2973"},"modified":"2025-03-27T15:49:01","modified_gmt":"2025-03-27T15:49:01","slug":"commodity-prices-still-correlating-with-e7-output","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2973","title":{"rendered":"Commodity prices still correlating with E7 output"},"content":{"rendered":"<p>Dollar industrial commodity prices fell by 8% during May but are still up by 15% from six months ago, as measured by the Journal of Commerce index, covering 18 materials used in manufacturing production including crude oil and natural gas.<\/p>\n<p>The six-month rate of change of commodity prices continues to correlate closely with that of industrial output in seven large emerging economies (the &#8220;E7&#8221;) &ndash; see first chart. This relationship suggests that 1) the recovery in commodity prices since early 2009 has been driven by &#8220;fundamentals&#8221; rather than speculation and 2) prices will&nbsp;rise further unless E7 six-month output growth slows to below about 3%, or 6% annualised.<\/p>\n<p>Such an output slowdown, meanwhile, is unlikely while E7 real narrow money, M1, continues to expand strongly &ndash; second chart.<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/commodities010610.gif?__SQUARESPACE_CACHEVERSION=1275406717759\" alt=\"\" \/><\/span><\/span><br \/><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/e7ind010610.gif?__SQUARESPACE_CACHEVERSION=1275406429696\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dollar industrial commodity prices fell by 8% during May but are still up by 15% from six months ago, as measured by the Journal of Commerce index, covering 18 materials used in manufacturing production including crude oil and natural gas. The six-month rate of change of commodity prices continues to correlate closely with that of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2973","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2973"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2973\/revisions"}],"predecessor-version":[{"id":5282,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2973\/revisions\/5282"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}