The calm before the storm

For the most part, commodity prices moved in a narrow range this week, but this relative stability may come to an abrupt end soon. Presidents Trump and Xi are set to dine together on Saturday at the G20 and trade will be high on the agenda. While a deal is possible, it is highly unlikely that any agreement will prove to be a lasting resolution of trade tensions between the US and China. What’s more, metals with a high exposure to the auto sector, such as palladium and lead, look particularly vulnerable if discussions go badly. By the end of the week, markets will be firmly focussed on the biannual OPEC meeting on Thursday and Friday and oil prices could fall sharply if OPEC leaves output unchanged. We expect OPEC to announce a small cut in production, in conjunction with Russia.