Most industrial commodity prices rose this week, as the US and China announced that they had reached a phase-one trade deal. The agreement cancels the tariffs scheduled to come into effect this Sunday (which had the potential to be particularly damaging for metals demand) and rolls back some existing tariffs. The deal is an additional reason to expect sentiment in commodities markets to improve next year and push up prices.
Optimism on trade in the aftermath of the agreement will probably continue to support commodity prices next week. The release of Chinese activity data for November (Monday), which we expect to have improved across the board, could also give a lift to prices. Otherwise, euro-zone flash PMIs for December (Monday) and US industrial production figures for November (Tuesday) will be published. Further evidence that activity in the manufacturing sector is bottoming out would be positively received by commodities markets.
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