Commodities Daily - May 14, 2019

> Brent sells off but defends $70/bbl frontier after China's tariff retaliation. Today, market players will eye the OPEC monthly report (due at around 14:00 Moscow time), eurozone industrial production, and US import and export prices. The report should be the main driver for oil prices, especially ahead of the JMMC meeting this Sunday. We think Brent will continue to successfully defend the $70/bbl frontier today. Its next major resistance level is $69.13/bbl, the 200-day moving average.> Gold skyrockets after China strikes back with tariff hike of its own. Our FX team noted today that market participants do not seem to expect further escalation in the trade war and that markets are likely to advance on any positive news. Still, unless some remarkable news on the trade front emerges, global markets will likely trade sideways today and in the upcoming week, ahead of important data in late May and early June. We expect gold's safe-haven appeal to fade somewhat and see gold prices easing into the $1,290-1,295/oz range later today. However, we note that gold is used as a hedge against inflation and could see high demand if tariffs look set to stay, as this would probably provide a significant boost to inflation.