Investor sentiment continues to sour

Oil prices fell again this week on persistent concerns that the market remains oversupplied. Most metals prices also slipped, despite China’s May trade data showing robust growth in commodity imports. Meanwhile, and perhaps surprisingly, the price of gold failed to benefit from safe-haven demand in the wake of the uncertainty created by the UK’s inconclusive election result on Friday. Looking ahead, the market’s focus will be on the outcome of the Fed’s FOMC meeting, which concludes on Wednesday. We expect the Fed to press ahead and raise the Fed Funds rate by a further 25bp. Elsewhere, there will be a raft of data out of the euro-zone next week and the results of the first round of the French parliamentary election this Sunday. We expect a strong showing for President Macron’s REM party.