The oil price ended the week flat despite Saudi Arabia pledging to cut output by 1m bpd in July at the OPEC+ meeting last weekend. Most other commodity prices rose, supported by China’s May trade data which showed strong growth in most commodity imports.
The outlook for US monetary policy, and its implications for the US dollar, will be key themes next week. We expect the Fed to leave rates on hold at the FOMC meeting on Wednesday and expect the US May inflation data (Tuesday) to show an easing of price pressures, both of which should be positive for commodities demand although they may be largely factored into prices.
Elsewhere, China’s May activity and spending data on Thursday will be closely watched. Early indicators suggest that industrial activity struggled in May and investment spending is likely to have been softer too, which will probably weigh on industrial metals prices. By contrast, crude refinery output is likely to show robust growth given the recent strength in crude imports and transport-related demand.
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