The current CRB (refined in 2005) is weighted at approximately 39% energy, 41% agriculture, 13% industrial metals, and 7% precious metals.

The CRB not only serves as a barometer of global inflation, but it also tends to anticipate profound changes in the global economic and financial cycle.

When the CRB rises sharply, it usually means that the world is demanding more energy, metals, and food. This typically occurs during phases of global expansion, infrastructure investment, reindustrialization, or supply constraints (such as the Strait of Hormuz). Historically, major commodity bull markets have coincided with periods of strong performance for natural resource exporting countries like Argentina, Brazil, Australia, and Canada.

For Argentina and Brazil, a rising CRB can imply:

• Improved terms of trade.

• Stronger trade surpluses.

• Increased dollar inflows.

• Stronger currencies. (Not so much in Argentina due to FX restrictions)

• Recovery of fiscal balances via withholding taxes/royalties.

• Expansion of profits in sectors such as energy, mining, agriculture, and infrastructure.

In other words: high commodity prices tend to ease Latin America's external constraints.

This comes with a problem for us: US long-term 10- and 30-year bond yields are rising very sharply. That is, there is selling pressure that is driving up yields.

Now, the most important point is to distinguish WHAT type of rate increase is occurring in the US.

If the CRB rises because global growth is accelerating and inflation is accompanied by economic expansion, Argentina and Brazil can often benefit even from higher US yields. In fact, in several historical cycles, commodities, emerging markets, and long-term bonds have risen together.

The problem arises when US real yields rise:

• strong dollar,

• restrictive Fed,

• falling global liquidity,

• risk aversion.

That's when emerging markets suffer because capital flows back into 5% "risk-free" Treasuries, the USD strengthens, and global financing becomes more expensive. This scenario typically hits emerging market currencies and assets hard.

That's why it's not enough to just look at the 10-year or 30-year US Treasury yields. It's necessary to understand if rates are rising due to:

- Nominal growth + global demand → bullish commodities/emerging markets. When the CRB rises due to global demand (not restricted supply), the EMBI spread for emerging markets tends to compress because the perception of solvency improves.

- Monetary tightening and real interest rates → bearish emerging markets.

Today, the market is precisely looking at this tension: AI + reindustrialization + energy could sustain a commodities supercycle, but if that leads to persistent inflation, the Fed could maintain high yields for longer.

What will the new Fed chairman do about this? The market pivoted from lower rates to a potential rate hike in 2027, we'll see... Poor Kevin's got a tough road ahead. My view is that he won't make any changes until he has more information. The CRB at 515, soaring long-term yields, inflation above the 2% target, and a hawkish FOMC aren't exactly the ideal time to debut as a dovish chairman.

Stay tuned.