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Financial and commodity markets revealed some unexpected trends in 2021. As the year ends, our look back on the most-viewed OpenMarkets stories includes some of the surprising (lumber) and more anticipated (economic recovery) events to emerge.

Our top five stories span from January through November, but all contain highlights that remain important to financial market watchers as we enter a new year. Here they are, in order of most viewed:

 

In November, Alison Coughlin and Jon Lynch covered the market dynamics behind one of the year’s biggest stories: housing. Specifically, they honed in on the lumber and steel markets, which captured the attention of market participants and financial media everywhere in 2021. Both commodities saw all-time highs due to a range of factors that included the rising demand for home improvement projects, supply chain constraints and demand from China. These commodities remain an area to watch heading into 2022. As the authors wrote in November, “The COVID-19 pandemic and subsequent shutdowns have wreaked havoc on the prices of construction vital materials such as lumber, copper, aluminum and steel.  As economies begin to reopen, and supply chains start to normalize, uncertainty around the direction of these important commodities remains.”

 

Lumber proved to be among the most popular topics we covered in 2021. Soaring prices in the spring and summer affected everything from commercial construction to home improvement projects. In April, Coughlin dove into the many factors contributing to soaring prices, including diminished supply in Western Canada over 2019 and 2020. Though prices reverted to more normal levels late in the year, lumber remains an issue to watch if for no other reason than the historical nature of the recent price swings. Coughlin writes, “The wild swings in lumber prices during the past year could not have been anticipated – either by sawmills closing due to diminished supply, or by those demanding real estate and home renovations. Past price trends may be able to provide context, but the confluence of these factors has been historically unmatched.” 

 

In March, Gregor Spilker wrote the first of what became a series of stories around the emergence of a potential commodities supercycle. You can view all of our commodities supercycle stories here. In this piece, Spilker points out the potential drivers that suggest a new supercycle – a years-long period of commodity prices rising well above average. Those include a weaker U.S. dollar, pent-up demand, fiscal stimulus and growing demand for electrification and decarbonization. "Genuine commodity supercycles do not come around often. Going back one century, only three or four bona fide supercycles have been identified. Each was tied to very transformational periods of economic development,” he writes.

 

Back in January, widespread availability of COVID-19 vaccines was a new thing. Our roundtable of analysts looked at what they would mean for economic recovery. As a new COVID surge took effect in December, the economic recovery question is still unresolved nearly a year later. Jim Iuorio wrote at the time of the key question facing economies around the world, “There’s no doubt that the memory of pandemic will linger for years to come. The most important economic question is how quickly can the American consumer and corporate sector return to something resembling normal?”

 

The effect of net-zero carbon ambitions from institutions and countries around the world became another major financial story of 2021. In January, CME Group partnered with Xpansiv markets CBL to launch Global Emissions Offset futures, which provide delivery of physical carbon offset credits that have undergone stringent screening. The contract helps market participants access standardized and validated instruments for the emerging voluntary emissions market. As the story notes, “The shift to a low-carbon economy requires a long-term effort, but near-term reduction strategies that leverage emissions offset projects may also help be part of the solution today.”


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