Oil takes a tumble

Agricultural commodities were some of the star performers this week as a truckers’ strike in Brazil raised concerns about supply. In contrast, metals prices struggled, as the trade talks between China and the US failed to deliver tangible results, and oil prices fell back on Friday on reports that OPEC members and Russia were considering raising output. Turning to next week, US foreign policy announcements, and particularly any moves towards greater protectionism, could be a key driver of investor sentiment in commodities markets. Towards the end of the week, the release of China’s official and unofficial PMI data will provide early indicators of activity in May. We expect the PMIs to have edged up. Elsewhere, the US employment report for May is likely to be strong, which will boost expectations of a June rate hike and could weigh on the price of gold.