Commodities Daily - January 30, 2019

> Oil pares back losses; US inventory data, Fed and US-China talks eyed. We think that a small crude stock draw of up to 1 mln bbl is in the cards for today's EIA data thanks to higher exports and lower imports, and despite lower refinery runs. Even though refined product stockpiles are likely to show an increase, we expect the net effect on prices to be positive. We also think that dovish rhetoric from Fed Chairman Jerome Powell today and signs of progress in the US-China trade talks today and tomorrow could result in a sharp rise in risk appetite. With that in mind, we believe Brent could start moving toward $63/bbl later today.> Gold hits YTD high of $1,315/oz in anticipation of dovish Fed. Yesterday's Brexit vote in the UK Parliament gives Theresa May the chance to restart negotiations with Brussels. Today, investors will be awaiting the Fed's decision (22:00 Moscow) and press conference (22:30).> Base metals prices rising strongly. The market is reacting not only to the US-China trade talks that start today but also details of a massive economic stimulus program the Chinese government is planning for this year. Nickel prices have received additional support from the situation with Brazilian producer Vale.