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Energy & Precious Metals - Weekly Review and Calendar Ahead

Post time: 2019/7/29 19:41:09

Pacific Exchange(PEX)according to Investing news on 29 July 2019 - It was another week of geopolitics vs demand worries that seemed all too familiar in oil, only that the outcome was higher prices this time versus the previous week’s collapse.

Newly-minted British Prime Minister Boris Johnson became the latest cast member of the UK-Iran tanker-hostage saga, passing the week without changing a word in the script. Equally interesting was U.S. Secretary of State Mike Pompeo’s offer to be top negotiator in the nuclear conflict with Tehran, without the other side seeing the need to even respond.

At the end, tensions in the Middle East provided much better support to crude prices than in weeks past, with the market settling up every session except Wednesday’s. The one negative session that almost undid all of the week’s gains came – oddly – on the back of a 11-million-barrel crude draw. The second largest drawdown for this summer had its value diminished by talk that it was skewed to the effects of Hurricane Barry rather than actual demand for oil.

All of which means the market could remain volatile in the near-term unless a proper catalyst emerges for directional trade.

Which brings us to the coming week’s agenda and what could be the single largest event this year for not only oil but also gold and most other commodities: the first U.S. rate cut in a decade. Until Friday, there were still posers on whether a rate cut is likely, as better-than-expected GDP for the second quarter raised doubts about the widely-anticipated Federal Reserve easing set for July 31.

Apart from the Fed, the central banks of Japan and England also face interest rate decisions in the coming week. That aside, the U.S. jobs report for July, along with Chinese, U.S. and euro zone manufacturing PMI, among others, make up for a data-heavy week that again pits concerns about the global economy versus official response.