| Recent equity market moves imply both spot commodity prices and future expectations for these prices are sharply overdone, but this view is not shared by Macquarie. The broker continues to believe in at least a partial disconnection between the equity and physical markets, as the range of potential outcomes continues to broaden due to ongoing concerns about the future of European and US economic growth.
The key for Macquarie is how these events impact on Chinese raw material demand, as it is this that ultimately will drive commodity prices. Looking forward, Macquarie expects persistent Chinese inflationary pressures will ease in coming months, something that would allow for a relaxing of domestic credit tightening measures..............................................Full Article: Source
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