Commodities Daily - March 21, 2019

> Oil up on bullish EIA data, dovish Fed, while US-China trade deal uncertainty weighs. How the market digests yesterday's array of factors will be key. While the dovish turn from the Fed can certainly have a short-term positive effect and the EIA data was decidedly bullish, what appears to be a congealing view of slower growth (as the Fed seemed to be responding to) plus headwinds from the latest negative developments on the US-China trade deal provide substantial obstacles for oil to move significantly higher. We believe that these factors will curtail upside for Brent today and tomorrow. We see Brent struggling to stay above $68/bbl today.> Gold soars as Fed dovishness surpasses expectations, but dollar-positive US-China trade deal uncertainty weighs. The Fed adopted a more dovish stance than markets had anticipated, which weighed on the dollar and supported gold yesterday. Gold is likely also benefiting from fears of an economic slowdown down the line that is forcing the Fed into its current dovishness. However, the recent surge in uncertainty over the US-China trade deal is dollar supportive, to gold's detriment, particularly with US President Trump retaining a tough stance over the retention of import tariffs on Chinese goods. Given the competing factors currently at play, we think gold is likely to stick within the $1,315-1,320/oz range for the rest of this week.