All eyes on China

The more industrial commodities have had a good week, which was vindicated to some extent on Friday by data showing a surge in China’s commodity imports in September. Meanwhile, the minutes from the Fed’s FOMC meeting, published on Wednesday, seemed to support our view that the Fed will hike rates again this year. Fed officials acknowledged the low level of core inflation, but the majority appeared to think that it need not be a factor preventing monetary tightening. Attention will be focussed on China next week as the twice-a-decade Party Congress opens on Wednesday. There are likely to be few surprises in terms of policy priorities, but by the end of the week we should at least have a clearer understanding of Xi Jinping’s power within the Party. On the data front, China’s September activity and spending data on Thursday could provide direction for metals prices. The data are likely to show strong y/y growth given that the Mid-Autumn festival fell in September last year.