By eFXdata — Jan 07 - 10:30 AM
Synopsis:
MUFG highlights the diversification potential of commodities amid Trump’s sweeping policy pivots, recommending a selective bias across energy, base metals, precious metals, and agriculture for 2025.
Key Points:
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Policy Impacts:
- The “trifecta” of Trump’s trade, energy, and fiscal policies strengthens the case for commodities as a diversification tool in 2025 portfolios.
- The wide distribution of policy outcomes warrants selectivity in commodity exposure.
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Commodity Bias for 2025:
- Energy: Neutral-to-bearish amid potential policy-driven volatility.
- Base Metals: Neutral-to-bullish, driven by mixed fundamentals and possible demand boosts.
- Precious Metals: Bullish, reflecting heightened tail risks and safe-haven demand.
- Agriculture: Neutral, with steady fundamentals but exposure to weather and trade risks.
Conclusion:
MUFG advises a strategic and selective approach to commodities in 2025, leveraging their diversification benefits while hedging against Trump-induced tail risks.
Source:
MUFG Research/Market Commentary