Forget the glum doomsters. Hedge funds increased bullish bets on commodities by the most since August on mounting optimism the global economy will avoid another recession, boosting prospects for raw-materials demand, Bloomberg reports.
Money managers raised combined net-long positions across 18 U.S. futures and options by 12 percent to 737,647 contracts in the week ended Oct. 18, Commodity Futures Trading Commission data show. Wagers increased most in energy and agriculture, led by heating oil, gasoline, coffee and soybeans.
The Standard & Poor's GSCI gauge of 24 commodities climbed 7.4 percent in October, on track for the biggest monthly advance this year, as European leaders moved closer to resolving the region's debt crisis. Reports last week showed U.S. housing starts jumped to the highest since April 2010 and manufacturing unexpectedly accelerated, increasing investor confidence that the world's largest economy isn't tipping back into recession.
"People are looking around saying, 'You know what, the world isn't ending,'" said John Stephenson, a senior vice president and fund manager at First Asset Investment Management Inc. in Toronto, which manages $2.7 billion of assets. "It's time to buy some commodities."
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