Commodities looking for direction from China
Commodity prices have generally risen this week, in large part due to optimism about further economic stimulus in China. We are more cautious as we expect the expansionary impact of stimulus to only feed through into the real economy in the second half of the year. What’s more, it is only likely to stabilise the economy rather than give a marked lift to growth. As such, we remain of the view that most commodity prices will end the year lower.