“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.”
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