Commodities stay calm at the beginning of a week busy with central banks meetings
Excess volatility was absent on the commodities market on Monday, in the start of a week busy with central banks meetings.
At the beginning of a busy week commodities moves were just scant. In addition to economic data, the week will accommodate a raft of central banks meetings, the first of which is the RBA meeting on Tuesday. No change in monetary policy stance is anticipated on part of policymakers.
ECB, BOE and BOJ meetings are all scheduled for Thursday. The ECB meeting is rightly expected to come into focus, after President Mario Draghi’s dovish words in Jackson Hole. In an ambience of mounting speculations of approaching QE, it is believed monetary stimulus would precede the TLTRO commencement and occur while the ABS purchasing procedures are under discussion.
The BOE is expected to make no changes to its monetary policy path, although the July minutes showed its current stance is not backed by full consent. The BOJ is expected to stand aside from acting for now.
In Ukraine, there was yet another soaring of geopolitical tensions as news came of Russian troops having crossed the border in southern Ukraine. Ukrainian President Poroshenko announced, thousands of foreign troops accompanied by hundreds of foreign tanks had crossed into Ukrainian territory.
German Chancellor Merkel confirmed the escalation and said that if the interference continues, Germany would consider adopting more anti-Russian sanctions. Russian President Putin insisted on talks with Ukraine, emphasizing that the statehood of southeast Ukraine and the interests of the citizens there should be high on the agenda.
On the trading floor, there were bearish speculations in the week ending on August 26 regarding the energy complex, excluding natural gas. The net long position in crude oil futures slumped by 5 746 contracts, to 317 727, compared to a week ago. Heating oil net longs dropped to 1 545, by -787 contracts. For the gasoline net long position, the drop was to 41 668, by -8 503 contracts. Natural gas net shorts rose to 166 288, by 3 412 contracts.
There were also mixed speculations regarding the metal complex, except for palladium. The gold future net longs plummetedto 113 169, by -24 807 contracts. For silver futures, the drop was to 22 524, by -1 627 contracts. Platinum net long position declined to 40 572 , by -5 021 contracts, while that of palladium increased to 28 182, by +191 contracts.
