Commodities still on the sidelines

The prices of most industrial commodities traded in a narrow range this week in part owing to stronger-than-expected PMI data from the US and elsewhere. However, the bigger picture is that global economic growth is still relatively weak and we think that this will continue to weigh on the prices of industrial commodities in the coming months. Next week will be quiet on the data front, in part because of the Thanksgiving holiday in the US. Instead, trade once again looks set to be the main driver of investor sentiment with China reportedly inviting US officials for high-level talks next week. If these talks take place, investors will probably interpret this as a sign of progress. As a result, we would expect to see a tick-up in the prices of most industrial commodities.