For most European economies we are forecasting what we have termed a “partial V” type recovery with annual GDP grow… https://t.co/enZKk5R0Dn
Weekly Pricing Pulse: Commodities fall on continued concerns about demand
Commodity prices, as measured by our Materials Price Index (MPI), fell another 0.5% last week, their sixth consecutive weekly decline. Commodity prices have now moved to their lowest level since January. While US and Chinese policymakers dialled back on the harsh trade rhetoric of recent weeks and helped rally equity and bond markets, commodities continued to sag, on worries about demand.
Iron ore prices fell again, dropping 1.7% for the week. Chinese iron ore port stocks rose 3.3% as weak demand, well stocked mills and falling finished steel prices discouraged buying. Chinese steel inventories stand 27% higher y/y, suggesting iron ore's recent rout may continue. Likewise, non-ferrous prices are suffering from disappointing Chinese demand and fell 0.3% last week, despite nickel rising 4.4%. Nickel prices have jumped by 50% since June on fear (now realized) that Indonesia would bring forward its proposed ban on nickel ore exports to the start of 2020. Fiber prices dipped 2.3% on falling demand and a softening cost base. The MPI's energy sub index slipped 0.9% on declines in both oil and coal prices as traders reduced long positions in expectation of continued volatility.
Attention in markets shifts to Europe this week. While the formation of a coalition government in Italy avoids a snap election there, Prime Minister Johnson's manoeuvring over Brexit has raised political tensions in the UK and made the possibly of a snap election before the end of October more likely. Sterling has already suffered in currency markets with a cascading effect likely to be felt in commodity markets. The question is, will policymakers step in to provide more stimulus? In particular, will events prompt the US Federal Reserve cut interest rates when it meets in two weeks?
- Capital Markets Weekly: US high-grade issuance establishes new record alongside record-low corporate pricings
- Weekly Pricing Pulse: Commodities price gains find a new gear, rising strongly across sectors
- Capital Markets Weekly: Argentina and Ecuador successfully progressing debt restructuring
- Weekly Pricing Pulse: Commodities push higher, but with less gusto
- US Monthly GDP Index for June 2020
- Capital Markets Weekly: Issuance quietens reflecting European/US vacation seasons
- Weekly Pricing Pulse: Commodity prices finally pause following multi-month climb
- Country risk month ahead: August 2020
We expect India’s real GDP growth for (FY) 2020–21 will contract 6.3%, due to COVID-19 resulting in the first reces… https://t.co/hnPkdyrbaQ
We have revise up our US forecast for real GDP growth in 2020 from -6.1% to -4.8%. However, rising COVID-19 infecti… https://t.co/X9wKU6yhwA