Commodities Daily - August 13, 2019

> Oil vulnerable amid falling stock markets; US CPI, API data on the radar. Today's highlights data-wise are US CPI (15:30 Moscow time) and the weekly API inventory update. If the core CPI gauge ticks upward to 2.3% y-o-y, it would reach a level corresponding to a 2.0% reading from the Fed's preferred inflation gauge, the core PCE deflator. This would be negative for stocks and oil prices, as it would weaken the case for aggressive Fed rate cuts this year, which many have been calling for to sustain economic growth amid the deteriorating US-China trade war. We think that Brent is likely to dip below $58/bbl later today amid deteriorating risk sentiment. However, we expect the API data due overnight to be bullish, sparking a $0.5/bbl rebound.> Gold testing new highs amid growth in political risks. Yesterday, US National Security Advisor John Bolton's statement that the US would support a hard Brexit if the British government decides to go that way supported gold prices. Additional support came from further protests in Hong Kong and a surprisingly strong showing from the opposition in Argentina's primary elections. With demand for defensive assets on the rise, we think gold prices will hold above $1,520/oz today.> Base metals mixed amid US-China trade talk uncertainty. Important for investors was a comment by Zhu Jun, director of the PBoC's international department, who said that the yuan is at an appropriate level currently. This happened after the PBOC set the currency's reference rate stronger than analysts had estimated. Today, we will be looking out for data on Chinese industrial production for July, which will include figures on output of coal, steel and aluminum.