Commodities Daily - October 1, 2019

> Oil slides amid stronger dollar despite data showing production decreases from major producing countries. Today, investors will eye Bloomberg's estimate for OPEC September production data and US ISM manufacturing PMI data for September. The latter, in our view, is more likely to show a rebound back to expansion territory (following a strong drop off last month to 49.1) amid the constructive US-China trade war news flow. The API US inventory data due overnight is more likely to come out upbeat, in our view - we expect a w-o-w decrease in US oil inventories of around 2 mln bbl. Given all of this, we expect Brent to recover back above $60/bbl later in the day today. > Gold under pressure amid stronger dollar and rise in 10y US Treasury yields. Yesterday was the last day of the third quarter and the end of the fiscal year in the US. Sentiment was optimistic, contributing to declining interest in defensive assets. European data caused EUR/USD to weaken, while developments around the possible impeachment of US President Trump failed to hinder the dollar, and the DXY index is now at its highest point since March 2017. Today, US central bankers (Evans, Clarida and Bowman) and their European counterparts (Draghi and the head of the Bundesbank) are expected to speak, and the US manufacturing PMI will also be published.