The weaker dollar bolsters commodities

This week started on a positive note for industrial commodities with strong June activity and investment data out of China. A weaker US dollar was also supporting commodity prices, more generally. That said, the star performers were agriculturals as the grains, in particular, continue to benefit from concerns over ultra-dry conditions in the US farm belt. Looking ahead, it will be quiet on the data front next week. A technical committee of OPEC and non-OPEC oil producers is set to meet on Monday in Russia. We are not expecting a major policy change but production quotas might be assigned to Libya and Nigeria, which are currently exempt. There is also a FOMC meeting in the US next Wednesday, but again a policy change appears unlikely. Nonetheless, the statement will probably concede that the recent decline in inflation has been more broad-based than previously argued.