Monetary Policy Decisions to Dominate Commodity Market Sentiments

Commodity Market Watch

Commodity markets witnessed a boost, partly attributable to Chinese regulators intensifying efforts to stimulate domestic consumption. However, persistent inflationary pressures in the United States tempered gains in other sectors.

The US dollar surged to a six-month high, hitting 105.43, fueled by enduring inflation concerns within the United States. This has fostered expectations of ongoing monetary tightening by the Federal Reserve.

In major developments, August saw the US Consumer Price Index (CPI) rise by 0.6 per cent, marking the most substantial monthly increase since May 2022. Meanwhile, core inflation moderated for the fifth consecutive month, reaching 4.3 per cent, aligning with market forecasts. Retail sales in August also surpassed expectations, rising by 0.6 per cent, underscoring consumer resilience in the face of elevated prices. This sets the stage for potential interest rate hikes in November or December, following an anticipated pause this month.