After a quiet start to 2016, commodity markets have sprung into life. Late in the week, comments by OPEC members that they would deepen output cuts and possibly extend them until the end of 2017 reversed earlier falls in the oil price. In contrast, nickel fell back as Indonesia partially lifted its ban on ore exports. Meanwhile, China’s trade data showed that China’s appetite for commodities remained strong in December. Looking ahead, Donald Trump will be inaugurated as the 45th US president next Friday, but he is unlikely to provide much detail on his policy plans in his inaugural speech. Earlier in the week, China’s December activity and fixed investment data are likely to be the focus of commodity markets. We expect industrial production to have remained strong, but fixed investment may have weakened due to the cooling property sector. Meanwhile Friday’s Q4 GDP number for China is likely to confirm the pick-up in activity in late 2016.
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