Global Commodities Strategy
We are holding to our Brent and WTI price forecasts for 2014. WTI should remain fairly stable and average USD99/bbl, while improving supply will see Brent weaken to average USD105/bbl for the year.
Economic stimulus measures by the Chinese government pose short-term upside risks for metals prices. However, we maintain our bearish multi-quarter outlook on both Chinese economic growth and prices for key metals such as copper and iron ore ( see 'Piecemeal Stimulus Does Not Alter Core View', April 3).
Spot gold looks strong on a short-term basis as minutes from the US Federal Reserve's last meeting, released April 9, have modestly pushed back market expectations for timing of US monetary tightening. We expect renewed declines by gold towards USD1,200/oz in H214 as the US economy continues to gather steam.
|Further Pullback Ahead?|
|Ratio: MSCI World Equity Index / CRB Commodities Index|