Trade to remain the focus of markets

The prices of most commodities rose this week, buoyed by a surge in the oil price, firmer equity prices and optimism about progress in the US-China trade talks. We think that some sort of face-saving deal will be agreed, not least because President Trump is now personally involved, which could have positive implications for the prices of a number of US agricultural and energy exports in the coming months. Turning to next week, attention could return to the health of China’s economy with the release of December trade data on Monday and the possibility of December credit data later in the week. Given the weakness in the December manufacturing PMI, commodity import demand may have eased back. That said, the earlier slump in the price of oil could mean that crude imports remained high last month.