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The US non-farm data for July released last night was far below expectations and the previous value. The Sam's Rule is on the verge of being triggered, and concerns about economic recession have caused market panic.

Hedge funds are turning bearish on commodity futures.This is the first large-scale short selling since 2016.

Data showed a sharp increase in bearish commodity futures contracts held by hedge funds, betting on a basket of 20 raw materials to fall, a trend not seen in more than eight years.

The broader commodity market also bears out the trend. The Bloomberg Commodity Index, which tracks a basket of energy, crop and metal futures, has fallen 4% in 2024, reversing gains at the start of the year.

Analysts pointed out that the hedge fund's move shows that the market is cautious about the future economic outlook. Commodity markets may face further pressure as global economic uncertainty increases.

Oil markets were particularly notable, with hedge funds slashing their long positions in Brent crude by the most in nearly two years as algorithmic selling fueled bearish sentiment.

Data released by the U.S. Commodity Futures Trading Commission (CFTC) on Friday showed that speculators' net long positions in NYMEX WTI crude oil fell by 27,320 contracts to 211,917 contracts in the week of July 30, a six-week low. Net long positions in Brent and WTI crude oil fell by 93,065 contracts to 273,685 contracts, a seven-week low. Currently, the price of Brent crude oil has fallen by 2.63% to $77.43 per barrel.

The diesel market has also been significantly affected. Hedge funds raised their net bearish bets on diesel to the highest level in nearly four years on concerns about falling demand. Diesel is a staple of the global economy, powering trucks, ships and trains.

The main reason for this trend is the market's concerns about the global economic slowdown. The US, the world's largest crude oil consumer, has seen its economic data show signs of weakness. In addition, high US interest rates have also put pressure on consumer confidence.