More hawkish central banks may put a lid on prices

It was a week of central bank decisions, culminating in ‘Super-Thursday’.  The big picture is that central banks generally sounded more concerned about the rise in inflation, despite the ongoing spread of the Omicron variant. Although there was not a major reaction in commodity markets, the prospect of earlier monetary tightening in the coming years, and the likelihood of a somewhat stronger US dollar, represent headwinds for commodity prices. Next week may be relatively quiet in markets, given the approach of the holiday season. Indeed, this will be our last Commodities Weekly Wrap of 2021. However, it will be a busy few days on our return in early January, with the release of China’s December PMIs and the OPEC+ meeting scheduled for 4^th January. And not to forget, given that OPEC+ left the last meeting ‘in session’, there could still be a change in output policy before January if the group perceives a greater risk to demand from the spread of Omicron. – This will be the last Economics Weekly for 2021. The next Weekly will be sent on Friday 7th Jan. 2022 –