Energy and Metals Outlook

Confidence in Energy and Metals continues to be constrained by uncertainty about the global economy, both in the short and long-term. Fears about a slowdown in China, which consumes about half or more of annual demand for some commodities, intensified in May, following fresh volatility in the renminbi. A semblance of stability returned in June, but high levels of debt in its economy, which expanded only 6.7% (y-o-y) in Q1, could have serious global financial ramifications. Combined with the risk of Brexit and a marked deterioration in US employment readings, the US Fed could not justify earlier warnings of a rate hike on June 15.

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