Commodity demand expectations are plummeting – TDS
|Demand expectations embedded in the complex is declining at a fast clip, TDS Senior Commodity Strategist Daniel Ghali notes.
Beijing to take a more forceful approach in driving domestic demand
“Our real-time gauge of demand expectations embedded in the complex is declining at a fast clip, even as the press conference that followed the Third Plenum revealed Beijing will take more forceful action in driving domestic demand in the coming weeks, with a focus on the consumer and housing sectors.”
“The first hints of such stimulus may come at the readout of the July State Politburo meeting chaired by President Xi at end-July, with key state agencies following up soon after. For the time being, demand signals are likely to drag the base metals complex lower, particularly as supply risk premia is unlikely to offer an offset this time around.”
“Commodity Trading Advisors (CTA) selling activity may be most pronounced in Aluminium, with algos potentially selling up to -30% of their max size if the downtape extends over the coming week.”
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