Commodities Daily - July 16, 2021

> Oil pressured by stronger dollar despite upbeat OPEC report as investors eye OPEC+ meeting date. Brent is trading near $73.5/bbl as we write, with investors waiting for OPEC+ to set a date to formalize a deal to hike production after delegates said that the UAE had made significant progress in resolving its standoff with Saudi Arabia. Also on the radar today are eurozone June CPI data, US June retail sales, the preliminary University of Michigan consumer sentiment index for July and the weekly Baker Hughes rig count. We expect Brent to climb back above $74/bbl today as we anticipate upbeat US macro data. US wages are rising and savings are high, so spending fundamentals should remain solid as the economy continues to reopen this summer and fall.> Gold trades sideways amid mixed comments from Fed officials. Gold traded sideways in a $1,820-1,835/oz range yesterday, while the 10y Treasury yield decreased from 1.35% to 1.30%. EUR/USD slid from 1.184 to 1.181, which created headwinds for gold. Meanwhile, US macro data was mixed for the gold market. More interesting, however, were yesterday's comments from Fed officials. Fed Chairman Jerome Powell affirmed an ultra-loose monetary policy stance when speaking in the Senate Banking Committee and said it was not time to withdraw stimulus. Gold is trading near $1,825/oz as we write. Today, the market awaits US data releases, including June retail sales and July University of Michigan consumer sentiment, as well as eurozone CPI data for June. We expect gold to remain in a $1,810-1,835/oz corridor today.OIL PRESSURED BY STRONGER DOLLAR DESPITE UPBEAT OPEC REPORT AS INVESTORS EYE OPEC+ MEETING DATE Brent fluctuated around the $74/bbl mark for much of yesterday's session, sticking within a $73.5-74.5/bbl corridor before sliding toward $73/bbl during US trading hours. It eventually closed down $1.29/bbl at $73.47/bbl. Major pressure came from the dollar, which recovered much of the ground lost in the prior session amid a drop in weekly initial jobless claims as the labor market steadily gains traction. Fed Chair Jerome Powell may not be as eager to normalize monetary policy as other central banks, but data is likely to eventually force his hand. The dollar is now heading for its best weekly gain in about a month, also buoyed by investors drifting toward safety, as rising Covid-19 infections are looming over the recovery. Meanwhile, new cases in Tokyo reached a six-month high with a week to go before the Olympics start.Oil found a modicum of support yesterday from an upbeat monthly OPEC market report. The group anticipates a gradual recovery in demand for crude this year and next as it closes in on a deal to revive production still shuttered since the pandemic. The report contained the first detailed estimates for next year, highlighting that "looking ahead to 2022, risks and uncertainties loom large and require careful monitoring to ensure the recovery from the Covid-19 pandemic." The global demand estimate for this year was left unchanged, with the OPEC Secretariat estimating that demand will climb by 3.28 mln bpd in 2022, pegging global oil demand at an average of 99.86 mln bpd.For 2022, OPEC expects US oil demand to be marginally below the 2019 level, mainly due to a lag in transportation fuel demand, while Chinese and Indian demand is expected to surpass pre-pandemic levels in 2022, supported by a firm recovery in transportation fuel and industrial fuel demand, including demand for petrochemical feedstock. OPEC revised its non-OPEC supply forecast for 2021 down by 0.05 mln bpd m-o-m, with y-o-y growth now forecast at 0.82 mln bpd, as supply in Latin America, China and Europe was revised lower, only partly offset by marginal upward revisions to the rest of the Americas, Asia and Africa.Brent is trading near $73.5/bbl as we write, with investors waiting for OPEC+ to set a date to formalize a deal to hike production after delegates said that the UAE had made significant progress in resolving its standoff with Saudi Arabia. Also on the radar today are eurozone June CPI data, US June retail sales, the preliminary University of Michigan consumer sentiment index for July and the weekly Baker Hughes rig count. We expect Brent to climb back above $74/bbl today as we anticipate upbeat US macro data. US wages are rising and savings are high, so spending fundamentals should remain solid as the economy continues to reopen this summer and LD TRADES SIDEWAYS AMID MIXED COMMENTS FROM FED OFFICIALSGold traded sideways in a $1,820-1,835/oz range yesterday, while the 10y Treasury yield decreased from 1.35% to 1.30%. EUR/USD slid from 1.184 to 1.181, which created headwinds for gold. Meanwhile, US macro data was mixed for the gold market. Initial jobless claims decreased w-o-w to 360k, slightly above the 350k consensus but lower than the previous week. Meanwhile, the Philadelphia Fed business outlook index came in at 21.9 points, missing the consensus of 28.0, while US industrial production rose 0.4% for June versus a 0.6% rise expected. The Empire State Manufacturing index for July printed 43 points, smashing the 18 expected. More interesting, however, were yesterday's comments from Fed officials. Fed Chairman Jerome Powell affirmed an ultra-loose monetary policy stance when speaking in the Senate Banking Committee and said it was not time to withdraw stimulus from the economy. He also said that the Fed is closely watching inflation and reiterated that the recent acceleration is transitory. At the same time, St Louis Fed President James Bullard said "substantial further progress" had been made on inflation and also employment, and that it is time to start removing stimulus. Gold eventually closed flat yesterday at $1,830/oz.Gold is trading near $1,825/oz as we write. Today, the market awaits US data releases, including June retail sales (expected to be down for third month in a row at -0.3% m-o-m) and July University of Michigan consumer sentiment (expected to rise from 85.5 to 86.5), as well as eurozone CPI data for June. We expect gold to remain in a $1,810-1,835/oz corridor