Commodities Daily - October 8, 2019

> Oil trades sideways amid political unrest in Iraq and Ecuador, US-China trade talk skepticism. This morning, Brent is slowly gravitating toward the $59/bbl mark amid a cautious stock market advance. This comes despite China's September Caixin services PMI this morning showing the slowest pace of service sector growth in seven months. Today, investors will eye the US September PPI at 15:30 Moscow time (we expect producer prices to have remained muted). Later in the day, investors will be watching speeches by the Fed's Charles Evans and Chairman Jerome Powell for hints about what the Fed may do at its meeting later this month. Today, we think that Brent will struggle to hold above $58/bbl amid downbeat reports from the US-China trade negotiations that could dampen risk appetite.> Gold retreats this morning amid optimistic data from Germany. Gold came under pressure yesterday, losing 0.5% after Fed Chair Jerome Powell stressed the importance of the Fed's independence from both political and private influences. Today, the US PPI for September (15:30 Moscow time) will be published, while Powell will speak at a conference in Denver at 21:30. Following new US sanctions against 28 Chinese tech companies announced yesterday, we expect gold to recover back to $1,500/oz today.> Chinese markets reopen following long public holiday. Base metals are mixed ahead of the latest round of trade talks Washington on Thursday and Friday. Yesterday, the US announced new sanctions against 28 Chinese tech companies, including Hikvision. Despite this, the yuan strengthened this morning, and the Caixin PMI data did not disappoint investors.