According to the Bloomberg Commodities Index, a measure of 26 raw materials lost 2.7% this week – the most since February 2017. The losses stand out in a week when other risk assets, like emerging-market stocks, were in the green, mentioned a Bloomberg report.
According to the indices, soybeans took the biggest hit, with prices falling to the lowest in almost a decade as Chinese duties on US supplies took effect. Moreover, metal and energt markets were also caught by fears that the trade spat will set off a global economic meltdown. Copper prices earlier this week also sank to a one-year low.
China, the biggest consumer of everything from copper to coal, has warned that the proliferation of tariffs could cause a global recession. Analysts believe there is a real possibility of a squeeze occurring next week and the trade dispute will likely remain until after the US midterm elections in November.
Traders are also closely studying data from China for evidence of a slowdown. On Friday, reports showed weaker-than-expected growth in imports, and indicators of investment, factory output and retail sales growth all slowed in May.
Primary market movers include copper, considered an economic bellwether, whose prices are poised for a fifth weekly loss; oil, whose futures in New York have plunged 4.2% to a little over $70 a barrel this week and soybeans, which had a 6.5% drop in its prices.