Commodities Daily - September 5, 2019

> Oil prices surge on improving sentiment amid mixed API data; EIA inventory update eyed. Following the API data, we expect the EIA to report a crude oil stock build of 1-2 mln bbl, which is likely to disappoint investors and could induce profit taking. Due for release today are US ADP employment, jobless claims, durable goods, factory orders, and services and composite PMIs - these releases will be key for determining further momentum in risk sentiment. We also note that Japanese media are reporting that the US is seeking to arrange a meeting between Trump and Iran's Rouhani on the sidelines of the UN General Assembly later this month. This is weighing on oil prices.> Gold prices dropping on positive news from the US, Europe. Yesterday, the UK Parliament passed a bill that increases the likelihood that Brexit will be postponed until next year. Italy, meanwhile, has formed a government, the US and China have agreed to restart trade talks, while the controversial extradition bill in Hong Kong that helped trigger mass protests has been withdrawn. A number of key data releases are due from the US today, including a labor report and PMIs. Given the signs of progress in several thorny political issues globally, we expect gold to drift further lower today, perhaps falling to $1,530-1,535/oz.