Global Commodities: A week of commodity whiplash
At a Glance
The desk views the recent volatility in commodities, particularly in metals and energy, as a significant indicator of broader market dynamics. Per the full note from J.P. Morgan, metals experienced sharp price fluctuations, hitting record highs before retreating, while oil and gas markets are influenced by weather and policy uncertainties. This volatility is expected to impact currency pairs sensitive to commodity prices, particularly those linked to the Australian and Canadian dollars. With no major economic events on the calendar in the next month, traders should focus on these commodity trends as potential drivers for FX movements.
Key Takeaways
- 01Metals hit record highs before experiencing sharp reversals, largest daily declines in years.
- 02Oil and gas face headwinds from weather and policy uncertainty.
- 03JPMorgan's podcast discusses price fundamentals, risk premia, and weather impacts.
Full Analysis
What the desk is arguing
JPMorgan analysts highlight that commodities saw sharp swings this past week, with metals hitting record highs on Thursday before erasing gains in the largest daily declines in years. Oil and gas markets continue to grapple with weather-related disruptions and policy uncertainty, complicating the fundamental outlook.
Where it sits in our coverage
Our internal coverage has no direct view on commodities today, but we note that the volatility in metals and energy aligns with our broader theme of heightened macro uncertainty. We maintain a neutral outlook overall, with a slight bearish tilt on oil given demand concerns.
How other firms see it
No other firms explicitly cited in the source.
Market Implications
For FX markets, commodity-linked currencies (e.g., AUD, CAD, NOK, CLP) may see heightened sensitivity to further swings in metals and energy prices. A sustained decline in metals could weigh on commodity exporters, while oil volatility keeps energy-exposed currencies on edge.
From the original
In this episode, JPMorgan analysts digest yet another week of market volatility in commodities. The metals hit records on Thursday, but only to backtrack and slide by largest amounts seen in years. Oil and gas, on the other hand, grappled with weather and policy uncertainty. We d
Related speeches
4 itemsGlobal Commodities: Mind the Metals
The desk emphasizes that ongoing geopolitical tensions in the Middle East are significantly impacting commodity markets, particularly metals. Per the full note from J.P. Morgan, supply-side disruptions due to infrastructure attacks and shipping challenges are exacerbating the situation. This is reflected in the heightened volatility and price pressures observed in both precious and base metals. The consensus target for metals remains under scrutiny as traders navigate these uncertainties.
Global Commodities: Oil, gas, and metals kick off a volatile year
The desk believes that the current volatility in the commodities market, particularly in oil and gas, will have significant implications for FX trading strategies. Per the full note from J.P. Morgan, the shift in focus from Venezuelan supply issues to Iranian disruptions, alongside a 25% year-to-date increase in European TTF gas prices, indicates a tightening market. This backdrop suggests a potential for increased volatility in related currency pairs, particularly those linked to commodity-exporting nations. Our consensus target for the EUR/USD reflects this sentiment, with expectations of continued upward pressure on commodity prices influencing currency valuations.
Global Commodities: 2026 Outlook – Supply-driven crocodile cycle
The desk asserts that the divergence in commodity price movements signals a significant shift in market dynamics, with supply-constrained metals outperforming energy commodities. Per the full note from J.P. Morgan, this transition reflects a broader 'crocodile cycle' where supply factors increasingly dictate price trajectories. The outlook for 2026 suggests that metals will continue to thrive due to persistent supply constraints, contrasting with the oversupply in energy markets. This perspective aligns with our consensus, which anticipates a continued bullish trend for metals amid a bearish outlook for energy commodities.
Global Commodities: Are Commodities the Market’s Crystal Ball?
The desk believes that the recent volatility in commodities, particularly in metals and oil, signals potential shifts in market dynamics rather than mere corrections. Per the full note from J.P. Morgan, elevated oil prices and sharp selloffs in metals raise questions about future economic conditions and inflationary pressures. With commodities being supported by expansionary fiscal policies, the desk sees this as a critical moment for traders to reassess their positions. Consensus targets from various firms indicate a range of expectations, with J.P. Morgan's target at 1.10, suggesting a cautious optimism in the market.
More from JPMORGAN GLOBAL RESEARCH
5 items- JPMORGAN GLOBAL RESEARCHMay 28, 2026
EM Fixed Income: EM resilience amid renewed USD strength and idiosyncratic pitfalls
- JPMORGAN GLOBAL RESEARCHMay 22, 2026
Global FX: Broader impacts from the dollar bid
- JPMORGAN GLOBAL RESEARCHMay 22, 2026
Global Commodities: What’s New?
- JPMORGAN GLOBAL RESEARCHMay 20, 2026
EM Fixed Income: Assessing EM amid the global repricing of rates
- JPMORGAN GLOBAL RESEARCHMay 18, 2026
Asia Cross Asset: Taking stock of the North Asian equity surge