Oil, gold and corn prices surged to records, and the prices of copper, wheat, sugar and a host of other commodities staged solid rebounds from Tuesday's sell-off.
Driving this was another fall in the value of the US dollar, which dropped below 1.53 to the euro on the mixed economic news.
US credit markets are pricing in a cut of 0.50% and perhaps as much as 0.75% when the Fed meets on March 18, and that's causing the US dollar to be sold off.
With the European Central bank, the Bank of England and the Bank of Canada meeting tonight our time and not expected to lower rates, except in Canada where there's a new bank crisis emerging, the attractiveness of the dollar continues to fall.
This is driving more and more financial investors deeper into commodity markets, especially the huge oil market; gold because of its high profile and solid depth, and in the spotlight commodities such as grains, edible oils and copper which are in strong demand from China.
It's verging on a boom of bubble proportions and copper prices are now with a few cents per pound of the all time high reached in May 2006. Oil closed over $US104 a barrel and gold jumped to well over $US995 an ounce before closing at $US988 an ounce.
Traders said the reason for the huge rallies of the past couple of weeks is easy to explain: commodities they say, are merely responding to the weaker dollar, and this trend will continue. As lonmg as the greenback falls, that's going to boost commodities. As a result those with an inflation hedge mentality are scrambling for cover and getting into commodities, not just gold.
The euro rose to a record $US1.5303 overnight
Crude oil jumped to a record $US104.56 a barrel, gold futures hit $US 995.20 an ounce, the highest ever.
Corn futures in Chicago soared as much as 3.6% to a record $5.7425 a bushel, before settling back at $US5.70. Wheat rose, as did other agricultural commodities.
