- Most industrial commodity prices fell this week as concerns about global economic growth intensified. A raft of weak economic data from the US and the euro-zone seems to suggest that the recent sluggishness in manufacturing may have now shifted into the services sectors. While services aren’t as commodity intensive as manufacturing, they still account for a fairly significant share of demand, especially for energy. We think that the global economy will slow further in the months ahead, which will weigh on investor sentiment and the prices of industrial commodities.
- Next week will be quiet on the data front, so markets will probably take direction from the publication of the Fed minutes (on Wednesday) and the resumption of US-China trade talks (on Thursday and Friday). The Fed minutes are expected to hint at further easing in the months ahead. If they don’t, we would expect commodities prices to fall. Elsewhere, OPEC’s Monthly Oil Market Report (MOMR) will be released (on Thursday) and the level of Saudi Arabian output in September will be closely watched. We estimate that production fell to around 8.0m bpd from 9.8m in August owing to the attacks on Aramco’s oil facilities. Any radically different figure could provide a shock to oil prices.
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