Profit-taking evident in metals

There were some big gains this week in some of the agricultural commodities, primarily as a result of supply concerns. In contrast, weak Chinese August activity and spending data weighed on the prices of the base metals. In fact, both industrial and precious metals appeared to suffer from a bout of investor profit-taking. Turning to next week, we expect the Fed to leave rates unchanged at the FOMC meeting on Wednesday although it will probably announce the start of balance sheet normalisation. The Bank of Japan is also likely to leave rates on hold at its monthly meeting.