Commodities Daily - July 9, 2019

> Oil ticks lower as investors trim bets on aggressive Fed cuts; Middle East tension and monthly EIA report in focus today. Global markets appear to be in a holding pattern, looking for signals of what central banks will do next. Fed Chairman Jerome Powell's two days of testimony in Congress start tomorrow. Today, he will deliver opening remarks at a conference hosted by the Boston Federal Reserve. Oil investors will also have a chance to eye the monthly EIA report today, as well as the API US oil inventory report due overnight. We think Brent is likely to hover slightly below $64/bbl for most of the day today, faced with mild stock market headwinds and a likely bearish EIA outlook.> Gold driven by view of upcoming Fed moves as it consolidates below $1,400/oz. Markets will now be looking for signals of what central banks will do next, beginning with Fed Chairman Jerome Powell's two days of testimony in Congress starting tomorrow. Today, he will be delivering opening remarks at a conference hosted by the Boston Federal Reserve. We think that the upside for gold prices if he does in fact suggest a 25 bp cut is limited, given that such an outcome is already priced in. If he doesn't hint at a cut, it could mark the beginning of a prolonged correction that would become abrupt if the Fed does indeed hold off on cutting. We think that gold is more likely to continue drifting lower today but will find support at just below $1,390/oz.