Commodities Daily - September 23, 2019

> Oil steady amid fading US-China trade optimism, Saudi supply concerns. Today, investors will eye speeches by three regional Fed presidents. Climate Week is also kicking off in New York City. At the annual event, government and company officials may provide updates on the recovery of Saudi oil output following the recent attacks. We expect the news flow on Saudi production to be key for oil prices this week. As we write, a dismal September manufacturing PMI reading for Germany (it fell to 41.4), is weighing on Brent as well as EUR/USD. The eurozone manufacturing PMI figure is also expected to come out downbeat. We see the weak PMI data pushing Brent closer to the lower end of its current $64-65/bbl range today.> Gold again approaching $1,520/oz amid elevated geopolitical risk and poor German data. On Friday, the Chinese delegation in the US canceled a series of meetings on agricultural issues, but later both sides confirmed their willingness to continue talks in October at a higher level. This morning, the gold market was disappointed by Germany's manufacturing PMI, which fell to 41.4 in September. Today is data-heavy, including a preliminary US PMI reading and the Chicago Fed index for September. Three Fed voters are also due to speak. Against a neutral geopolitical backdrop, gold is likely to stay around $1,515-1,520/oz today.> Base metals again declining, with nickel an exception. Uncertainty over the US-China trade talks persists, while the yuan continues to steadily weaken. Chinese August trade data published this morning showed a drop in copper scrap imports, though copper concentrate imports posted a slight increase. Three-month forward contracts on copper are trading around $5,700/tonne, zinc has fallen to $2,290/tonne and aluminum is holding close to $1,790/tonne amid slowing production.