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Ryan McKay, Research Analyst at TD Securities, suggests that this week is a fairly light week in terms of economic data, with the main data points of note being the US housing data, along with manufacturing PMIs in the US and Europe.

Key Quotes

“Aside from the economic data, headlines and tweets from the President regarding trade will surely be the main driver of any major moves.”

“Precious metals have been constrained by a strong USD amid trade worries and emerging market weakness, but given the stretched short positioning across the complex, any signs of a shift in these narratives could help boost gold and friends. As such, any weakness in US data momentum relative to other G10, or some stability in emerging markets this week would keep the DXY below 95 and support the precious complex.”

“As for base metals, trade related news is the only catalyst capable of materially moving prices at this point, as seen when positive headlines followed by a negative Trump tweet whipsawed prices last week. In addition, the manufacturing PMIs will also be important as an indicator of sentiment surrounding trade. Furthermore, aluminum remains prone to headline risks of its own in regards to the Rusal situation, so any updates on the Russian sanctions have potentially to significantly move the aluminum market.”

“On the energy side, markets will continue to keep an eye on the DOE inventory data, as crude inventories continue to tighten, but delayed refinery maintenance sees gasoline stocks building. Furthermore, headlines on Iran sanctions and the OPEC/Non-OPEC meeting this weekend will also drive sentiment and volatility in the market.”

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