The non-farm data released last Friday have undoubtedly become a key node and opportunity for commodities, with US non-farm payrolls unexpectedly weak, recording only 266000 growth, far below market expectations of nearly 1 million growth. highlights the imbalance of the US economic recovery. In order to solve the problem of labor shortage (residents can get objective subsidies even if they are not employed), enterprises have to raise wages sharply, and as the Biden government promotes infrastructure plans to stimulate further economic recovery, wage growth is further higher. Inflation is expected to inevitably rise for some time to come. The economic recovery of the United States is uneven, but on a larger scale, there is also an imbalance between the recovery of developed countries and emerging markets, due to differences in the popularity of vaccines and repeated epidemic problems in emerging markets, which is a drag on economic recovery. this leads to limited supply of commodities, which is in sharp contrast to the demand growth caused by the economic recovery in developed countries, which in turn leads to a further imbalance between supply and demand and stimulate inflation.

The latest Goldman Sachs report judges that the current stage is a sweet spot for commodities, inflation is starting to rise, monetary policy will not tighten for quite some time, and raw material prices are expected to rise further. More commodity returns are expected over the next 12 months, with commodity futures prices continuing to rise, especially copper hitting a more than 10-year high. Wall Street investment banks such as Goldman Sachs and Bank of America are unanimously bullish, arguing that the global economic recovery and surging spending on renewable energy and electric vehicle infrastructure will drive a long-term rebound in industrial metals prices, advising investors to increase their positions. Copper prices have doubled in the past year to more than $10,000 a tonne and BofA said it could hit $20,000 if demand surged and supply fell sharply.

In fact, copper prices have started this strong rally since March 2020, and in January 2021, a series of measures such as larger fiscal stimulus bills and infrastructure bills accelerated the upward trend of copper prices as a result of the "blue wave" launched by the election victory of incumbent US President Joe Biden. In April, with the accumulation of factors such as fiscal stimulus, monetary policy and the popularity of vaccines, the US economy took the lead in entering the stage of accelerated recovery in the developed economies, further bringing benefits to the copper demand side.

The current market environment is the global loose monetary policy and the rebound in demand, supply shortages and potential rising inflationary pressure brought about by the accelerated economic recovery. Under such circumstances, commodity prices generally rose, and none of ferrous metals, non-ferrous metals, energy and agricultural products were spared. The Bloomberg Commodity Spot Index, which tracks the prices of 23 raw materials, is at its highest level since 2011.

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