Commodity price moves were surprisingly muted this week considering the news that the “Phase One” trade deal between the US and China may involve the lifting of some of the tariffs already in place. That said, there is still considerable uncertainty about the eventual outcome of the trade talks and whether sufficient progress will be made to move to a Phase Two.
While trade developments will remain a key driver of sentiment next week, economic data releases will give us some insight into how the global economy fared early in the fourth quarter. October industrial production and retail sales data for China (Thursday) and the US (Friday) will provide an indication of commodities demand. Although we think that China’s activity held up well last month, the bigger picture is that there are clear signs of a slowdown, which will be a key factor weighing on the prices of industrial commodities in the coming months.
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