IMF Outlook Adds to the Allure of Oil and Metals

The International Monetary Fund on Monday raised its forecasts for global economic growth in 2018 and 2019 to 3.9 percent, which would be the fastest pace since 2011. That is good for global equities, of course, but it is particularly bullish for crude oil prices and industrial metals prices. It also means that a wave of monetary tightening is coming to the global economy.

Positive surprises to euro-zone growth and solid data out of the U.S. have been supportive of the global economy, including growth in Asia. But the stronger growth globally weighed on the dollar last year, and will likely do so again in 2018 as emerging-market economies see stronger growth in the year ahead. This is especially true for commodity-focused economies, which are likely to benefit significantly from a global economy that appears by many measures to be firing on all cylinders.