Donald Trump’s announcement that he will pull the US out of the nuclear agreement with Tehran and re-impose sanctions on Iran’s crude exports caused oil prices to jump this week. Meanwhile, China’s commodity import volumes held up in April, with the exception of soybeans.
Next week is looking relatively quiet in terms of data releases. China is set to publish its industrial production growth figures on Tuesday. We think that headline growth will have picked up in April. But slower infrastructure spending probably dragged down fixed investment growth. This could weigh on the prices of industrial commodities. The focus in energy markets is likely to remain on the fallout from the re-imposition of US sanctions. Investors will be looking for any signs that other countries are starting to buy less oil from Iran or that Trump is willing to grant exemptions to major importers.
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