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DG365FD46564GFH654FU898 The broader commodities complex is set to rebound following several months of weakness, according to a new report from Barclays Capital. The firm noted that "Investor selling of commodities has intensified in recent weeks and hedge funds have been particularly aggressive…Gross short positions across the major U.S. commodity futures markets are now 30% larger than they were at the start of September and net hedge fund length has halved. Institutional investors have also been unusually active in cutting positions." The firm argued that this data is bullish for commodities, from a contrarian perspective. Furthermore, Barclays wrote that "Despite the lack of resolution in Europe, the macro-economic situation elsewhere has brightened considerably. Evidence is mounting that the U.S. is emerging from its soft patch and recent data supports the view that China is heading for a soft landing.” In light of its view, Barclays predicted that commodities are poised for a "swift rebound.” "Copper could benefit most from an improvement in the financial-market outlook as prices are trading a long way below fair value,” the firm added.
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