3rd March 2017

For a second month in a row, the Reuters-Jefferies CRB index did not do very much of anything, finishing slightly lower on the month and is now basically flat on a year-to-date basis (see boxed in area in our chart below). Much of last month’s drift lower in the index was on account of dollar strength in February, this after the greenback dropped sharply during January. The Euro in particular came under the most pressure this past month, as investors are starting to get queasy about the approaching French elections that stretches over April and May. At one point, the Euro briefly breached the 1.05 level twice in the last ten days and also lost substantial ground against both the sterling and the yen. For their parts, the sterling and yen weakened for different reasons, the former on Brexit-related logjams, while the latter lost ground ahead of a likely Federal Reserve rate hike in two weeks. (More on that later).