Commodities Daily - October 24, 2019

> Oil surges on bullish EIA inventory data; US durable goods orders due. By the time this report will be released, investors will be digesting IHS Markit eurozone PMI data for October (services, manufacturing and composite index readings), which is expected to confirm that the ongoing contraction in manufacturing activity is increasingly affecting the European services industry. The main event, though, will be the release of September durable goods orders data from the US at 15:30 Moscow time. In our view, the chances of the data surprising to the downside are high given the global growth slowdown. We thus expect Brent to slide below $60/bbl today on weak data and, probably, profit taking as well. However, we expect the correction to be short-lived and see it retesting yesterday's high of $61.3/bbl in the coming week.> Gold trading at $1,490/oz ahead of US economic data today. French and German PMIs released this morning have had basically no impact on gold. The schedule for the rest of the day includes a speech from US Vice President Pence on China and US data releases in the afternoon (durable goods orders, initial jobless claims, PMIs and new home sales). We expect gold to continue trading sideways today in a range of $1,485-1,500/oz.> Copper prices up 1.1% yesterday. The two-day national strike that got underway yesterday in Chile included copper producers. Copper prices were also supported yesterday by a 30k increase in cancelled warrants on the LME. The ICSG published forecasts for the copper market in 2019-20. In the coming days we expect copper prices to mostly react to whatever details emerge from the trade talks between the US and China as well as on what emerges from China's Politburo meeting on the economy on October 28-31.