2nd September 2017

We thought at the start of last month that things would get rather quiet in the markets during August, allowing traders to take their summer vacations without having to constantly check their phones or scurry back to their desks. Instead, assaulted by a bevy of major headlines, the markets ended with a heightened degree of volatility that we have not seen in some time. August’s action was best captured in the Reuters-Jefferies CRB index (plotted below). We note that the index spent much of the first half of the month moving lower on account of a stronger dollar, weaker energy and grains and an uneven performance in much of the precious metals group. The tropical group languished as well, with sugar, cocoa and coffee all experiencing sharp declines.