Investors and economists have been caught off guard by the pace of the country’s reopening, which has set up the resources sector for another year of bumper returns.
The faster-than-expected reopening of the Chinese economy after three years of stifling COVID-19 restrictions has triggered frantic bullish repositioning, lifting raw materials prices and fuelling bets that returns from the sector could rival the 2021 boom.has given the Federal Reserve room to ease the pace of its policy tightening and potentially avert a recession, weakening the US dollar and lifting expectations for global growth.
But strategists agree it is China’s re-emergence that has underwritten the large moves in commodity markets in the new year. Higher raw material prices combined with a weaker greenback also pushed the Australian dollar to a fresh four-month peak of US69.85¢. But high-frequency data already indicates a swift resumption of activity in January after virus cases apparently peaked in major cities such as Beijing and Shanghai, although daily case reporting has been infrequent and unreliable.Ben Cleary, Tribeca Global Natural Resources
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