Upbeat manufacturing data from the US and China bolstered risk appetite this week, helping the prices of industrial commodities record another strong week. However, precious metals prices also did well, as further declines in real interest rates in the US boosted their prices. Meanwhile, geopolitical tensions between the US and China flared up once again, which may present a downside risk to our forecast for most industrial commodity prices to push higher by year-end. In fact, we expect that the US-China ‘Phase One’ trade deal will fall apart before long.
Next week brings data releases from China, in the form of spending, activity and credit data for July. We think that credit kept growing strongly last month, underpinning the broad-based rally in industrial metals prices. Meanwhile, we expect that industrial production growth in July will have picked up by more than the consensus suggests which, if we are right, should prove to be a further positive for the price of industrial commodities.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services