Fed: Rate call eyed for commodity direction – ABN AMRO


In view of analysts at ABN AMRO, expectations about Fed rate cuts proved to be supportive for alternative investments like US dollar-denominated commodities.

Key Quotes

“As we expect a lower probability for a larger than 25bp rate cut than the market is pricing in, there is a risk of disappointment in commodity markets. This may result in some profit taking on the longs and thus add some pressure later this month if the Fed cuts by ‘only’ 25bp.”

“On top of that, the lingering trade dispute between US and China continues to cap upside potential. As a result, the CRB-Index continued to trade within the 180-195 range (currently at 187).”

Commodity price outlook

  • For most commodities, we expect sideway trading to continue in the coming months. Oil prices are range bound (Brent $60-80/bbl, WTI $50-70/bbl) while base metals and tropical commodities also show a mixed picture.
  • Downside risks emerge for gold as the rally may have run out of steam.”

“All-in-all, we remain neutral on commodity prices this year but see upside potential in 2020.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD surges above 1.1100 as Trump announces steps against China

EUR/USD is trading above 1.1100, up on the day. President Trump said he orders companies to search Chinese imports for drugs. Earlier he criticized Powell's lack of action. 

EUR/USD News

GBP/USD jumps above 1.2250 on USD weakness

GBP/USD is trading close to the monthly highs above 1.2250 as the US dollar falls following Powell's hint of cutting rates and Trump's angry response. 

GBP/USD News

USD/JPY plummets to ten-day lows below 106 as Trump goes berserk on Twitter

The USD/JPY came under strong selling pressure in the last hour and erased nearly 100 pips as US President Donald Trump's latest rant on Twitter forced investors to seek refuge and ramped up the demand for safe-haven JPY. 

USD/JPY News

Gold gains more than $30, eyes 2019 highs on Trump’s tweet

Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal. 

Gold News

Powell powerless against Trump's trade wars – US braces for recession, USD set to move

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.

Read more

MAJORS

Cryptocurrencies

Signatures


  •  
  •  
  •  
  •  
  •