Commodities Daily - October 17, 2019

> Oil pares gains after yesterday's bearish API data; EIA data in focus today. After yesterday's API data, we expect the EIA to report a crude stock build of 5-7 mln bbl today, which would likely overshadow any draws in refined product stockpiles, driving Brent closer to $58/bbl later in the day. EU leaders will be taking part in a two-day summit at which Brexit, which is now the key factor driving global risk sentiment, will be at the top of the agenda. Important US economic releases today include jobless claims, industrial production, housing starts, building permits and the Philadelphia Fed index. Chinese GDP, industrial production and retail sales, as well as Japanese CPI, are due overnight.> Gold recovers to $1,490/oz amid rising expectations of Fed rate cut. Yesterday's US retail sales data for September was weak, while Chicago Fed President Charles Evans said he remains open to a possible rate cut. This morning, the Chinese Trade Ministry expressed optimism over the possibility of a "phase one" trade agreement with the US. Today, the market awaits further data from the US, while uncertainty over a potential Brexit deal remains, so we expect gold to firm and possibly break through the $1,500/oz mark.