The muted responses in commodity markets to the first hike in US interest rates since 2006 were a tribute to the clear communications of the Fed (in contrast to those of OPEC!) and, in our view, largely justified. Looking forward, we continue to expect US interest rates to rise further than most anticipate in 2016. Nonetheless, as we have also stressed, context is everything. As long as further Fed tightening next year is driven by stronger economic activity and a pick-up in more general price pressures, commodity markets should be able to take this in their stride too.
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