Commodities Daily - February 18, 2019

> Oil rallies along with stock markets amid US-China trade deal optimism. This morning, Brent continued to draw support from trade deal optimism as Asian investors priced in the developments from late Friday. However, data from China showing a 15.8% y-o-y decrease in new vehicle sales in January provided a headwind. Particularly concerning was a 140% y-o-y surge in sales of "new energy vehicles" (including electric vehicles), which is negative for oil demand growth long-term. Absent further strong drivers this week, technical factors suggest that Brent is likely to remain bogged down within the $66-68/bbl range.> Gold advances on US-China trade deal optimism; dovish Fed and ECB on the radar. On Wednesday, the Fed will release the minutes from the last FOMC meeting, where it softened its stance significantly. Given that the ECB is also expected to turn more dovish and may launch another round of Targeted Long-Term Refinancing Operations, our FX analysts see little potential for EUR/USD to move significantly higher than 1.13. Therefore, we expect gold to remain above $1,320/oz for the rest of the day today, with the US markets closed for a holiday.