Commodities Daily - July 23, 2019

> Oil holds steady as UK seeks European coalition to ensure safe shipping through the Strait of Hormuz. Positive stock market momentum - buoyed by expectations of the ECB signaling an easing of monetary policy or even a rate cut on Thursday and expectations of a Fed rate cut next week - is being counterbalanced by a strengthening dollar. Given the opposing forces currently in play, we think that Brent is likely to continue to trade sideways within the $63-64/bbl range for the rest of today. The API weekly inventory report is due overnight today, which we expect to be bullish.> Gold slides on dollar strength ahead of the UK PM announcement. Today the market waits to see who will become the next leader of the UK Conservative Party, as the results of a lengthy internal party election will be announced, and hence the identity of the next prime minister. Arch-Brexiteer Boris Johnson is expected to get the job, replacing Theresa May. If Johnson is elected, we would expect gold to start to build up some safe-haven premium amid fears of a hard Brexit. The market also awaits the IMF's World Economic Outlook, Eurozone consumer confidence and US releases including the Richmond Fed index, FHFA home prices and existing home sales. We think gold is likely to bounce back above $1,420/oz today.