What to watch as commodities traders prepare for Powell
BNN Bloomberg
Jerome Powell takes center stage for commodities this week, with the Federal Reserve chief set to unleash another large rate hike that could pile more pressure on energy, metals and crops.
Markets were in jittery form Monday ahead of the Fed’s big mid-week reveal: crude reversed earlier declines in the day to edge higher, gold is again pushing toward a two-year low and most industrial metals slid. The fear is that stronger anti-inflation medicine from the US and other central banks will not just squeeze demand or even trigger recessions but add to a dollar surge that’s battering commodities.
“A chunky rate hike is now largely priced into markets, but we think it could still keep a lid on prices” during this week, analysts at Capital Economics wrote in a note.
There’s a lot to watch elsewhere too. Europe’s leaders are hatching plans to fight the energy crisis, with Germany mulling nationalizations. The US will offer the latest insight on meat demand, and there’s a clutch of key conferences: on copper in Barcelona, gold in Denver and climate in New York and Pittsburgh. With geopolitical tensions running high, the UN’s General Assembly might also be a focus.
