Most prices rose this week, helped by a weaker dollar, stronger-than expected US retail sales in May and interest rate cuts by the People’s Bank of China. Natural gas prices rose particularly sharply due to a number of unrelated disruptions to supply. We don’t think there is a need to panic about Europe’s gas supply just yet, but the EU has to avoid complacency and continue building stocks ahead of winter.
Next week is relatively quiet on the data front. Demand in developed economies is likely to be the key focus. The June flash PMIs for the US, EU and UK (Friday) should show that economic growth remains subdued, potentially weighing on oil prices. In China, the loan prime rate is likely to be cut by 10bps on Tuesday. Although this could give a small boost to commodity prices, it is probably already priced in as the rate moves in tandem with other policy rates that were cut earlier this week.
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