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Commodities take a hit

The prices of oil, iron ore and many of the industrial metals plunged this week. Investor concerns about demand resurfaced as China’s manufacturing PMIs for April pointed to slower economic activity. Persistently high global stocks were an additional factor weighing on the price of oil. Elsewhere, the rebound in US non-farm payrolls in April data released on Friday underpins our forecast that the Fed will hike its policy rate again in June. Turning to next week, the price of gold could come under renewed pressure if M. Macron is successful – as seems likely – in the French presidential election. Fears of euro-sceptic parties taking power in a number of euro-zone countries had led to safe-haven demand for gold earlier in the year. On the data front, all eyes will be on China’s April trade data on Monday, which we expect to show a downturn in iron ore and copper imports.

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