Highlights of this week's Commodity Podcast:
1. Global markets experienced fluctuations in risk sentiment while closely monitoring inflation reports from both the United States and China, amid escalating geopolitical tensions in the Middle East.
2. US inflation figures surpassed expectations, leading to an immediate upturn in both the dollar and US 10-year treasury yields, surpassing 102.7 and 4%, respectively.
3. However, cooler-than-expected producer inflation print in the US on Friday, fostered speculation of earlier monetary easing by the Fed.
4. COMEX Gold prices rebounded sharply from a low of $2017 following the US inflation release. Despite initial volatility, gold prices ended the week flat due to a cooler-than-expected producer inflation print in the US
5. The ongoing Middle East conflict continued to drive safe-haven demand for gold, with silver also recovering, leading to marginal losses of around 0.10% by the end of the week.
6. WTI Crude experienced a significant rebound from $70.13/bbl to $75.25/bbl, settling 1% higher near $72.68/bbl. Strikes against Houthi targets in Yemen, in response to attacks on ships in the Red Sea, reintroduced war risk premium.
7. Crude oil prices may remain supported amid fears of disruptions and the need for vessels to divert, especially as Saudi Arabia warned that recent actions by the US and its allies could inflame tensions.
8. Most base metals on the LME hit one-month lows due to concerns about global manufacturing and construction activity, coupled with uncertainty surrounding the Fed's interest rate outlook.
9. Looking ahead, markets are set to focus on upcoming US retail sales data and speeches by FOMC officials . A robust performance in December's retail sales could prompt the Fed to adopt a cautious approach, potentially reducing the urgency for rate cuts.
10. Moreover, a third consecutive monthly decline in China's CPI in December raises expectations of the People's Bank of China cutting rates on its one-year policy loans for the first time since August.
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