The Commodity Futures Trading Commission (CFTC)’s reauthorization dance continues with the Senate approval of the CFTC Reauthorization Act of 2007. We’ve seen this all before, though, as the CFTC has been in regulatory limbo for a few years, with various reauthorization moves passed by lawmakers always stalling somewhere along the way. The New York Mercantile Exchange (Nymex) for its part voiced approval for the latest reauthorization act, especially as it pertains to energy markets. Nymex CEO James Newsome said in a press statement that Nymex “strongly supports the approach the Senate has taken on oversight of the energy markets. We believe this legislation would…implement reform in a focused and thoughtful manner.”
In other CFTC news, the agency released a study today finding that in the last 15 years, the relation between returns on investable commodity and equity indexes has not changed significantly. “Our study shows that the commodities markets are very independent markets,” said CFTC chief economist Jeff Harris in a press statement. “The study reinforces the notion that it is the fundamentals, such as weather, geopolitical forces and supply/demand that continue to drive commodity futures markets.” The study, however, is really not groundbreaking. Several studies have been conducted that show that commodities are non-correlated to equities and in fact performed as well or better with less volatility over a long period of time.
