Cazenove's Jeffrey: Commodities at risk of further correction

Slower global growth combined with the end of QE in the US has left commodities vulnerable to a further correction, Cazenove's Richard Jeffrey has warned.

The group's chief investment officer said prices have reached such expensive levels demand will soon wane. "There comes a point where increases in commodity prices become demand destructive and at which supply and demand dynamics would require a return to lower price levels," he said. "The spike in prices seen in Q1 2011 had clear negative impacts on global business sentiment (both manufacturing and services PMIs have fallen from their January/February levels), suggesting high prices are beginning to have a negative impact on real economies." Consumer indicators and disappointing e...