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: Mildly bid, but bull reversal remains elusive

EUR/USD is currently trading at 1.1078, representing marginal gains on the day amid oil price spike. The currency pair on Friday faced rejection at the resistance of the trendline connecting June 25 and Aug. 13 highs.

EUR/USD News

GBP/USD: Brexit optimism keeps bulls in the drivers’ seat

The GBP/USD pair has advanced for a second consecutive week, reaching Friday 1.2505, its highest since last July, and settling not far below this last. Fading odds for a hard-Brexit continue to underpin the Pound.

GBP/USD News

USD/JPY looking to close the bearish opening gap amid risk-off

USD/JPY gapped down to 107.44 on Monday’s open as risk appetite is diminished following the attack on Saudi Arabian oil facilities. The spot now trades near 107.80, aiming to close the bearish opening gap ahead of a big week. 

USD/JPY News

Gold prices shot higher by over 1% in risk-off start to the week

Gold prices have shot higher in the open this week due to the increased tensions in the Middle East following the attack on Saudi Arabia’s oil and gas facilities in Abqaiq which has suspended half of the kingdom’s processing.

Gold News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more

Forex MAJORS

Cryptocurrencies

Signatures