Summary

Precious metals led gains across the sector, as investor appetite was boosted by a weaker USD and easing concerns of monetary tightening.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: India

• Central bank speakers: BOE Governor Andrew Bailey; ECB Chief Economist Philip Lane

• Economic data: Brazil trade; Canada unemployment; Eurozone retail sales; Germany factory orders; Greece GDP, unemployment; Philippines CPI; US nonfarm payrolls (NY 8:30am / UK 1:30pm / AEDT 10:30pm), unemployment rate (NY 8:30am / UK 1:30pm / AEDT 10:30pm)

• Commodities reports: China weekly iron ore port stockpiles; Shanghai Exchange weekly commodities inventory (local release around NY 2:30am / UK 7:30am / AEDT 4:30pm); Baker Hughes weekly rig count (NY 1:00pm / UK 6:00pm / AEDT 3:00am Sat); OPEC August production survey; CFTC Commitments of Traders (NY 3:30pm / UK 8:30pm / AEDT 5:30am Sat); ICE Futures Europe Commitments of Traders (NY 1:30pm / UK 6:30pm / AEDT 3:30am Sat); SHFE warrant change data; LME inventory and warrant data (NY 4:00am / UK 9:00am / AEDT 6:00pm)

• Events: Oil & Gas Asia conference, Kuala Lumpur (final day); Eastern Economic Forum, Vladivostok (final day); Ambrosetti Forum, Cernobbio (through 6 Sep); World Giverny Forum; Italian Prime Minister Giorgia Meloni government celebration event

• Market data: CFTC Commitments of Traders (NY 3:30pm / UK 8:30pm / AEDT 5:30am Sat); ICE Futures Europe Commitments of Traders (NY 1:30pm / UK 6:30pm / AEDT 3:30am Sat)

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil edged higher as attacks between the US and Iran kept concerns of supply tightness high. Iran’s military said it targeted US bases in Kuwait and the UAE, according to the state-run Islamic Republic News Agency. Kuwait said it responded to missile and drone threats. This comes after the US military carried out a series of strikes in recent days. The tit-for-tat exchange of strikes is raising concerns of a reversal of the recent recovery in oil flowing through the Strait of Hormuz. The risk of the conflict widening and impacting alternate routes for oil to reach the international market also rose. Israel indicated that it was prepared to return to fighting if necessary and that an Iranian attack on the Jewish state would free it from any existing restrictions.

The market also heard conflicting messages on the longevity of the recent fighting. President Trump suggested the US bombing campaign wouldn’t last too long. However, a Reuters report earlier this week suggested White House officials are consider ramping up military action after the 3 November mid-term elections. Such a move would have a significant impact on the recovery phase of oil from the Persian Gulf. The oil market has been operating under the assumption that the impact of the conflict on oil flows has peaked and that a peace deal would eventually see exports back to normal before the year’s end. The prosect of an extended conflict will keep the oil flow constrained for the foreseeable future.

Natural gas markets were mixed, as traders took stock of the recent attacks and their impact on supply in local markets. European gas prices eased lower after the European Union gas coordination group said that despite lower storage levels there is no immediate risk for security of gas supply in the region. Moreover, it said that while the current situation is exceptional and requires close monitoring, it also differs significantly from the 2021-22 energy crisis. However, traders were more concerned in Asia, with North Asia LNG prices at their highest in more than three years on ongoing supply concerns. Spot LNG hit USD25.9/MMBtu, as traders are increasingly concerned about a prolonged disruption to flows through the Strait of Hormuz. Qatar has not sent an LNG tanker through the waterway since one of its tankers was hit by a missile in July. It has subsequently extended force majeure notices to customers in Asia.

Copper led the base metals sector higher on expectations of a limited escalation in the Middle East conflict, easing concerns of its impact on economic growth. This saw risk appetite improve, after being subdued amid the recent attacks by Iran and the US. Ongoing signs of supply tightness also continued to provide support. The latest export ban on copper concentrate by the Democratic Republic of Congo tightened an already constrained market. Copper concentrate production from major producers such as Chile and Peru has disappointed as well, with mining output plunging in June. Overall, we estimated South American mine production to contract by 3% to 8.5mt in 2026, marking a consecutive year of decline. Tight copper concentrate supply is likely to keep spot TC/RCs under pressure and squeeze refiner margins. China’s output fell 3% y/y to 1.1mt in June, as its struggles to source enough feed for its smelters.

Gold extended gains as the USD tumbled against the yen. It was also supported by slightly more dovish comments from the US policymakers.

Chart of the Day

Central bank buying is providing a strong floor for gold prices, with China not only purchasing gold consistently each month but accelerating its buying to around 20t, the highest in three years. Physical demand is shifting rather than weakening. China’s gold imports have risen by more than 80% y/y, helping offset softer imports from India. Overall, this points to a market where near-term rate-driven pressure could persist, but the medium-term case remains supported by fiscal risk, recovering investment demand, central bank buying, and resilient physical demand from China

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Summary

The energy sector posted gains, as attacks between US and Iran persist. Industrial metal struggled, as concerns over the global economy resurfaced.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None

• Central bank speakers: Fed Governor Christopher Waller; Cleveland Fed President Beth Hammack; Chicago Fed President Austan Goolsbee; RBA Assistant Governor Brad Jones

• Economic data: Australia trade balance; China RatingDog services PMI, composite PMI; Eurozone S&P Global services PMI, PPI; Malaysia rate decision; Switzerland GDP, CPI; Turkey CPI; US trade balance (NY 8:30am / UK 1:30pm / AEDT 10:30pm), initial jobless claims (NY 8:30am / UK 1:30pm / AEDT 10:30pm), ISM services (NY 10:00am / UK 3:00pm / AEDT 12:00am Fri), S&P Global services PMI (NY 9:45am / UK 2:45pm / AEDT 11:45pm), composite PMI; Vietnam CPI, industrial production, trade, S&P Global manufacturing PMI

• Commodities reports: Singapore onshore oil-product stockpiles; Russia federal budget oil and gas revenues (Aug) (NY 5:00am / UK 10:00am / AEDT 7:00pm); Insights Global ARA oil-product inventories; EIA weekly US natural gas inventories (NY 10:30am / UK 3:30pm / AEDT 12:30am Fri); SHFE warrant change data; LME inventory and warrant data (NY 4:00am / UK 9:00am / AEDT 6:00pm)

• Events: Rystad Energy APAC Summit, Singapore; Oil & Gas Asia conference, Kuala Lumpur; Eastern Economic Forum, Vladivostok; Middle East Energy 2026 (final day), Dubai; Energy Trading Week Middle East (final day), Dubai; ECB pre-rate-decision quiet period begins; Reform UK national conference, Birmingham (through 5 Sep)

• Market data: ICE Gasoil September options expiry

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices rose as the Middle East conflict escalated. The US military carried out a second wave of strikes in three days. Iran retaliated with drone and missile attacks on US bases across the Middle East. The risk to vessels transiting the Strait of Hormuz remains high. The US struck two Iranian vessels under a new “tanker-for-tanker” policy approved by President Trump, according to Axios. Earlier this week, two oil tankers attempting to exit Hormuz were reportedly hit by projectiles. US Treasury Secretary Bessent said that 17mbbl of crude exited Hormuz on Monday. Later, US Energy Secretary, Chris Wright, reiterated that figure and added that exports are averaging around 8mb/d.

Nevertheless, pressure is building in the refined fuel market. Inventories of gasoline in the US fell by 1,173kbbl last week to their lowest level in a decade. That was despite a drop in demand as the official end to the US summer driving season approaches. Distillate supplies on the East Coast are now at a record low. Total commercial oil inventories fell by 4,450kbbl last week after a four-week build, as refineries run at full capacity.

Natural gas prices in Europe and Asia also rose as supply disruptions persist. European natural gas prices hit their highest since January 2023, as the region faces difficulties in attracting LNG to help refill storage facilities. Across the continent they are 63% full, well below the average of 80% for this time of the year. Britain’s stocks are even lower, prompting warnings the country may end up paying high prices to secure supplies over winter.

Gold rebounded as a weaker USD boosted investor demand. The precious metal rose as much as 1.6%, as the USD fell following a sharp increase in the JPY. There was also a push-back from Fed Governor Williams on inflationary concerns. He said there’s evidence inflation is easing as the impact of tariffs fades while higher energy prices are not spreading to other services.

Nickel gained as Morowali Industrial Park, a processing plant on the island of Sulawesi, may have to cut production if new sources of water are not found. The company warned that the reduction in output could be 30–40%. The water shortages are the result of the El Nino weather pattern. Adding to the issues are reports that several Chinese-owned nickel smelters are weighing up coordinated output cuts as pressure mounts on profitability due to weak prices.

The rest of the base metals complex tracked lower on worries about the global economy. The escalation of fighting in the Middle East is raising concerns that subsequent high energy prices could hit economic activity. Ongoing production issues limited the downside for copper. Chile’s output fell 9.4% y/y in July to 403.4kt, according to statistics agency INE, attributed to severe storms that hit mining regions. Short-term availability of copper on the LME remains tight, with spot prices trading more than USD100/t above the benchmark three-month futures.

Chart of the Day

The drawdown of US gasoline stockpiles raises the spectre of reaching critical levels in coming months. The lower bound of US gasoline inventories is considered to sit around 190mbbls. Based on the weekly drawdowns over the past three months, those levels could be tested by October.

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Summary

The energy sector extended gains in reaction to fresh US attacks on Iran. Precious metals plunged, as higher energy prices raised concerns about rate hikes.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Vietnam

• Central bank speakers: ECB Governing Council member Pierre Wunsch, Brussels; ECB Supervisory Board Chair Claudia Buch, Brussels; BOJ Policy Board member Hajime Takata speech, Sapporo; Bank of Canada Governor Tiff Macklem press conference

• Economic data: Australia GDP; Brazil industrial production; Canada rate decision; New Zealand rate decision, building permits; Russia unemployment, retail sales; South Korea CPI; Spain unemployment; US ADP employment change (NY 8:15am / UK 1:15pm / AEDT 10:15pm), durable goods orders (NY 10:00am / UK 3:00pm / AEDT 12:00am Thu), factory orders (NY 10:00am / UK 3:00pm / AEDT 12:00am Thu), Fed Beige Book, MBA mortgage applications

• Commodities reports: Genscape ARA crude inventories (NY 4:00am / UK 9:00am / AEDT 6:00pm); Spain Cores provisional fuel consumption (Jul); EIA weekly US oil inventories, supply and demand report (NY 10:30am / UK 3:30pm / AEDT 12:30am Thu); SHFE warrant change data; LME inventory and warrant data (NY 4:00am / UK 9:00am / AEDT 6:00pm)

• Events: Oil & Gas Asia conference, Kuala Lumpur (through 4 Sep); Eastern Economic Forum, Vladivostok (through 4 Sep); Middle East Energy 2026, Dubai (through 3 Sep); Energy Trading Week Middle East, Dubai (through 3 Sep); Deutsche Bank dbAccess European TMT Conference (through 3 Sep); SEMICON Taiwan (through 4 Sep); Venice International Film Festival opens

• Market data: None

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil extended gains as fresh US attacks on Iran raised concerns about prolonged disruptions to supply. The US launched attacks against targets in the Islamic Republic. President Trump said they were in retaliation for Iran trying to place new mines in the Strait of Hormuz and for an attack on a military base in Jordan. Iran subsequently warned that it had launched a decisive operation against US bases in the region. The Islamic Revolutionary Guard Corp said the new fighting only tightened the lock on the Strait of Hormuz. In addition to the attacks, the US is pledging to cripple Iran’s economy. It is maintaining a naval blockade of Iran’s ports, which has significantly curbed the nation’s oil exports.

The renewed attacks come after a brief period of relative calm, which allowed Persian Gulf producers to move oil through the strait using a clandestine shuttle system. The dark fleet movements remain elevated and continue to provide an alternative route for some oil exports. However, activity has stopped increasing and appears insufficient to prevent the decline in overall Persian Gulf exports and oil flows. Moreover, the oil market is likely to come under significant stress, as disruptions to flows from the Persian Gulf continue to tighten global crude and refined product balances. This will keep inventories under pressure and support elevated prices.

European natural gas prices hit their highest since January 2023, while Asia spot LNG hit a five-month high as renewed hostilities in the Middle East dashed hopes of a revival in LNG supply. Flows had already been at a standstill, with no Qatari LNG tankers making the risky journey since they were attacked in early July. However, the latest escalation is likely to see the world’s largest LNG exporter become even more cautious about resuming exports. It has already extended force majeure on supplies to Italy’s Edison utility company into early November, while Pakistan won’t receive any cargoes until well into October. Europe will be competing against increasingly desperate Asian buyers as it looks to refill its storage facilities which are only 65% full, the lowest seasonal level in records going back to 2009. Smaller importers, such as Bangladesh, continue to seek cargo.

The escalation in the Middle East also pushed gold lower, as the USD strengthened and bond yields rose. The prospect of higher energy prices is revitalising concerns about inflationary pressures that could prompt the Fed to hike rates. Traders are on the back foot following Chair Warsh’s hawkish speech at Jackson Hole last week. Governor Barr said the central bank should be prepared to raise rates if inflation fails to subside.

Base metals were mixed amid heightened geopolitical risks. Copper edged lower as the stronger USD weighed on investor appetite. Zinc hit its highest level in four years on signs of tightening supply. The Middle East conflict continues to constrict Iranian ore supplies, while there have been numerous disruptions to mines in China. This has lowered treatment charges to -USD117/t. Orders to withdraw metal from LME warehouses have risen sharply in recent weeks. Aluminium also rose as attacks on two oil tankers put the focus back on risks to regional exports of the metal.

Chart of the Day

Transits of the Strait of Hormuz by tankers with their transponders turned off has been edging lower in recent weeks, but remains at elevated levels, according to Rystad Energy data.

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Summary

The energy sector jumped on renewed attacks in the Middle East. The rest of the complex was relatively unchanged amid subdued risk appetite.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Vietnam

• Central bank speakers: ECB Vice President Boris Vujcic keynote speech and panel discussion, Berlin; ECB Governing Council member Martin Kocher panel discussion, Alpbach; ECB Governing Council member Joachim Nagel press conference, Asheville

• Economic data: Australia current account, building approvals; Brazil GDP; China RatingDog manufacturing PMI; Eurozone CPI (NY 5:00am / UK 10:00am / AEDT 7:00pm), S&P Global manufacturing PMI, unemployment; France S&P Global manufacturing PMI; Germany S&P Global/BME manufacturing PMI; Greece S&P Global manufacturing PMI; Hungary GDP, manufacturing PMI; India HSBC manufacturing PMI; Indonesia trade, CPI, S&P Global manufacturing PMI; Israel rate decision; Italy CPI, unemployment, GDP, S&P Global manufacturing PMI; Japan capital spending, S&P Global manufacturing PMI; Mexico international reserves, S&P Global manufacturing PMI; Pakistan CPI; South Korea trade, S&P Global manufacturing PMI; UK S&P Global manufacturing PMI, Nationwide house prices, mortgage approvals; US JOLTS job openings, construction spending, ISM manufacturing (NY 10:00am / UK 3:00pm / AEDT 12:00am Wed), S&P Global manufacturing PMI (NY 9:45am / UK 2:45pm / AEDT 11:45pm)

• Commodities reports: Bloomberg August crude/condensate tanker trackers; LME Commitment of Traders report on metals positions; API weekly US oil inventories (NY 4:30pm / UK 9:30pm / AEDT 6:30am Wed); SHFE warrant change data; LME inventory and warrant data (NY 4:00am / UK 9:00am / AEDT 6:00pm)

• Events: Eastern Economic Forum, Vladivostok (through 4 Sep); Middle East Energy 2026, Dubai (through 3 Sep); Shein Hong Kong listing debut; John Ternus assumes role as Apple CEO; Mexican President Claudia Sheinbaum State of the Nation address; Massachusetts primary elections

• Market data: None

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices surged on the prospect of supply disruptions continuing for the foreseeable future as the US and Iran escalated attacks on each other. US Central Command said it fired on Islamic Revolutionary Guard Corp forces after spotting them preparing to deploy mines into the Strait of Hormuz. Iran retaliated with a missile and drone attack on US air bases in Jordan. The UAE said it dealt with a drone coming from Iran over the country’s territorial waters. Officials from both sides are now preparing for the conflict to drag on for months as talks are deadlocked.

Earlier in the day, Iran media reported an unidentified supertanker had hit two mines, although this was dismissed by US Central Command. The US reiterated that it had removed all Iranian mines from international shipping lanes in Hormuz. The US has ratcheted up its economic campaign on Iran. It is maintaining a naval blockade of Iran’s ports, which has significantly curbed the nation’s oil exports. Despite satellite tracking firms suggesting oil flowing through Hormuz is around 6mb/d, that is well below pre-conflict levels. In the meantime, the buffers the global oil market has been relying on are becoming exhausted. US inventories are nearing minimum levels, while China’s ability to keep imports low will be tested as seasonal demand picks up.

The latest attacks in the Middle East dashed hopes of natural gas exports resuming. While oil has continued to flow through the Strait of Hormuz, there have been barely any LNG tankers making the risky journey since a Qatari tanker was attacked in early July. European natural gas futures rallied more than 5% following the recent attacks, while North Asia LNG prices rose above USD24/MMBtu. European consumers are becoming increasingly concerned that, with a fifth of the world’s LNG currently offline, it will be impossible to refill depleted storage facilities. The only saviour will be weaker demand from key Asian users. China’s LNG imports are set to drop 18% y/y this month, based on ship tracking data.

Gold edged further lower as the renewed geopolitical risks stoked concerns about inflationary pressures will prompt the Fed to hike rates. This comes after Chair Warsh’s hawkish speech at the Jackson Hole symposium. The market responded by raising its expectations of a hike at the September FOMC meeting from 40% to 60%. The recent events are likely to have put a temporary halt to the money flowing into the sector. Exchange traded funds cut 12,110oz of gold from their holdings on Friday. The precious metal now looks vulnerable to selling, as the market adjusts to the apparent shift in the monetary policy backdrop.

Base metals were mixed amid rising geopolitical risks. Copper ended the session higher, supported by a slightly weaker USD. However, investor appetite was largely subdued across the sector amid limited risk appetite. Supply side issues remain in focus, with data highlighting the challenges ahead for the copper market. Chile’s copper output in July fell 9.4% y/y to 403.4kt, according to the national statistics agency. The zinc market is also facing similar challenges. Production from 17 major international mining companies dropped 8.9% in the first half of 2026, according to Shanghai Metals Markets.

Chart of the Day

China's imports of LNG have risen sharply in recent months. So much so that they are now at the top end of the five year range for this time of the year. This comes as the LNG market is yet to see any meaningful resumption of exports from Qatar. This could become any issues later this year, with the El Nino weather system threatening to keep hydropower generation subdued and force China to rely more on other energy sources such as natural gas.

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Summary

Precious metals slumped after hawkish comments from the Fed Chair. Energy and industrial metals both edged higher on ongoing supply side issues.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: UK; Malaysia; Philippines; Vietnam

• Central bank speakers: Riksbank Deputy Governor Per Jansson (economy and interest rates discussion, Vasterhaninge)

• Economic data: Australia Melbourne Institute inflation, private sector credit; China official manufacturing PMI, official non-manufacturing PMI; Colombia unemployment; Germany CPI; Hong Kong retail sales; India GDP; Japan industrial production, retail sales; Poland CPI; Serbia GDP, industrial output; South Africa trade balance; South Korea industrial production; Sri Lanka CPI; Thailand current account balance; Turkey GDP

• Commodities reports: Chile copper production (Jul) (NY 9:00am / UK 2:00pm / AEDT 11:00pm); SHFE warrant change data; LME inventory and warrant data (NY 4:00am / UK 9:00am / AEDT 6:00pm)

• Events: G20 finance ministers and central bank governors meeting, Asheville (through 1 Sep); Shanghai Cooperation Organisation summit, Bishkek (through 1 Sep)

• Market data: ICE schedule

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil ended the week lower as increases in oil flows through the Strait of Hormuz kept concerns over supply disruptions in check. Persian Gulf producers are willing to risk vessels being attacked and are increasingly sending tankers through Hormuz. Satellite images show that Saudi Arabia’s oil loadings inside the Persian Gulf are rising. About 7mbbl of shipping capacity was loaded at the Ras Tanura terminal. Iraq is also said to be offering buyers of its crude the option of collecting supplies from outside the Persian Gulf for the first time since the Middle East conflict began. Bloomberg reported that some oil traders believe around 6–8mb/d are currently being transported through the key waterway. US Central Command’s Admiral Brad Cooper said the US has cleared all the estimated 80–150 sea mines laid by Iran, although the claim is disputed by many US allies.

Nevertheless, the path to a deal to reopen the Strait remains elusive. President Trump signalled he won’t lift a naval blockade on Iranian ports, a key demand from the Islamic Republic. He’s also not interested in returning to the terms of the June ceasefire. Instead, the US has ratcheted up economic pressure. On Friday it moved to sever an Egyptian bank’s UAE branches from the US financial system.

Concerns of supply shortages emanating out of the Middle East continue to hang over natural gas markets in Europe and Asia. Benchmark futures in Europe gained nearly 2% last week as concerns around refilling its depleted storage facilities mount. That’s despite comments from Germany’s Minister for Economic Affairs and Energy, Katherina Reiche, that the country has seen a significant flow into storage facilities in recent days. Europe storage facilities are only about 64% full, compared with the seasonal norm of 81%. The prospect of exports of Qatari gas resuming was dashed after it extended the force majeure on LNG supplies to European and Asian buyers by another month due to uncertainty over the reopening of Hormuz. Cargo cancellations will continue into October for Pakistan, while Italy’s Edison SpA said that cancellations were extended into early November.

Copper and zinc led the base metal sector higher on renewed supply side concerns. Stockpiles of zinc LME warehouses are down more than 20% over the past two months. Disruptions to mines have led to smelter treatment charges falling as low as negative USD110/t. The tightness has pushed the premium for zinc for immediate delivery over the three-month contract to USD231/t. A similar move has occurred in the copper market, premiums surging as high as USD435/t last week. The shortages come as US traders import metal as they face possible import tariffs on refined metal.

Gold tumbled the most since July after Warsh pledged to fight inflation which increased expectations of rate hikes later this year. Markets now place the chance of a hike in September at 60%, up from 40% prior to his speech. This put the brakes on investor demand, which had experienced a resurgence after the US Treasury’s surprise liquidity injection drove yields and the USD lower. The intervention also revived concerns that US policy could erode confidence in the USD, thus increasing the attractiveness of assets such as gold. The precious metal now looks vulnerable to further selling, as the market adjusts to the apparent shift in the monetary policy backdrop

Chart of the Day

The UAE position in the Persian Gulf, with the Fujairah port outside of the Strait of Hurmuz, has enabled it to withstand the straits closure relatively well. The use of smaller tankers to shuttle oil out of the Persian Gulf has also benefited other producers. Saudi Arabia’s exports have taken a hit in recent week as the Houthi blockade in the Red Sea has further limited its options. However, overall exports from the two producers has been stable at around 5-6mb/d, according to ship tracking data. Its likely that some of the oil being counted as UAE is ultimately Saudi crude.

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Summary

Energy was steady, as talks to reopen Hormuz continue. Precious metals fell following high inflation data. A stronger USD weighed on investor appetite.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None

• Central bank speakers: BOJ Deputy Governor Ryozo Himino speaks, Saitama

• Economic data: China industrial profits; Germany GfK consumer confidence; Iceland CPI; Japan machine tool orders; Mexico trade, unemployment; Norway GDP; Philippines rate decision; Poland central bank meeting minutes; South Korea rate decision; Thailand trade; US wholesale inventories, initial jobless claims (8:30am NY / 1:30pm UK / 10:30pm AEDT)

• Commodities reports: Singapore weekly onshore oil-product stockpiles; Main North Sea October loading programmes; Insights Global weekly ARA oil-product inventories; EIA weekly US natural gas inventories (10:30am NY / 3:30pm UK / 12:30am AEDT)

• Events: Jackson Hole Economic Policy Symposium begins (through 29 Aug); ECB publishes latest monetary policy meeting account; PGA Tour Championship, Atlanta (through 30 Aug); ONS Foundation Conference, Stavanger concludes

• Market data: None

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil edged lower as the prospect of the Strait of Hormuz reopening improved amid ongoing talks. Iran and Oman have been conferring in recent days around the management of the waterway. The Islamic Republic’s military said that the two sides had reached a revenue-sharing agreement, although officials reiterated that a deal on navigation would not equate to an immediate reopening. That would most certainly require the US to lift its blockade of Iranian ports, a point Iran has stood by. The deal comes as further reports of oil flowing through the strait. President Trump claimed 10mbbl had exited Hormuz on Tuesday. Satellite imagery shows Saudi Arabia’s oil loadings inside the Persian Gulf are rising. About 7mbbl of shipping capacity was loading at the Ras Tanura terminal. Saudi Aramco is said to be offering crude in Asia for September loading at locations outside the Strait of Hormuz.

Nevertheless, concerns over shortages in the oil market persist. Reports suggest that President Putin is planning an escalation in Ukraine as peace talks stall. This could spark further attacks on energy infrastructure in the region. Ukraine has been striking key refineries and ports that have prevented Russia from exporting to the international market. These attacks have also tightened the diesel market. The reliance on inventories reduced US stockpiles of distillate to 103.4mbbl last week, their lowest ever on a seasonal basis according to US government data. Gasoline inventories also recorded a large drawdown last week (-2,536kbbl), while the US strategic reserve saw 3.7mbbl withdrawn.

Natural gas prices in Europe and Asia edged lower on hopes that Iran and the US are on a path to restoring supplies from the Middle East. European natural gas was down more than 7% following the report of a revenue sharing agreement between Iran and Oman. However, it pared most of those losses late in the session as it was unclear that the US would accept any deal that excludes it from control over the strait. North Asia LNG prices hit USD24/MMBtu during the session before easing lower into the close.

Copper led the base metals lower, as the USD strengthened, limiting investor appetite. There were signs of the recent supply squeeze easing. The premium of copper spot prices over the three-month futures has fallen to USD208/t, after being as high as USD435/t last week. Nevertheless, inventories on global exchanges continue to be drawdown. On-warrant stockpiles in SFE warehouses fell for a sixth day on Wednesday. After a brief rise last week, LME stockpiles continued their decline. The market remains on edge as it awaits an announcement from the White House on plans for tariffs on imported refined copper. This has seen metal flow into the country in recent months.

Gold retreated from a three-month high after a report showed US inflation is well above the Fed’s target. This triggered a bounce in the USD and US bond yields, which typically weighs on investor demand. Following the inflation data, market expectations that the Fed will hike rates by the end of the year rose. Even so, the downside for the precious metal looks limited as the debasement trade continues to attract investor buying.

Chart of the Day

Following the closure of the Strait of Hurmuz and the subsequent disruption to a fifth of the world’s supply, the International Energy Agency organised a plan to release 400mbbls of oil from government controlled stockpiles. The US was an integral part of that plan. Since April, the US strategic petroleum reserve has been drawdown by 125mbbls and now sits at its lowest level since 1984. While that leaves another 47mbbls to be left under the US allocation, the flow rate will likely slow as many storage facilities reach tank bottom.

5in5 with ANZ Podcast

Summary

Energy prices fell as diplomatic efforts eased concerns of an escalation in the Middle East. Industrial metals benefited from ongoing tightness.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None

• Central bank speakers: SNB Vice President Antoine Martin speaks on monetary policy and financial stability, Basel

• Economic data: Australia CPI, Westpac Leading Index; Russia industrial production; Singapore industrial production; Thailand rate decision; US consumer income (8:30am NY / 1:30pm UK / 10:30pm AEDT), PCE price index (8:30am NY / 1:30pm UK / 10:30pm AEDT), GDP (8:30am NY / 1:30pm UK / 10:30pm AEDT), durable goods orders (8:30am NY / 1:30pm UK / 10:30pm AEDT), mortgage applications; US personal spending (8:30am NY / 1:30pm UK / 10:30pm AEDT)

• Commodities reports: EIA weekly US oil inventories, supply and demand report (10:30am NY / 3:30pm UK / 12:30am AEDT); Angola final October crude export programme; Ofgem UK energy price cap announcement deadline

• Events: Nvidia earnings; Thailand Focus 2026 Conference, Bangkok (through 28 Aug); Deutsche Bank Technology Conference, Dana Point (through 27 Aug); ONS Foundation Conference, Stavanger (through 27 Aug); Equinor Global Supplier Day, Stavanger; TotalEnergies CEO Patrick Pouyanne at MEDEF business conference, Paris (5:45pm local time)

• Market data: None

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices edged lower as signs of diplomacy decreased the risk of an escalation in the Middle East conflict. Pakistan’s Army Chief concluded a one-day visit to Iran, with local media suggesting the trip yielded valuable results. Iran and Oman discussed the importance of resuming navigation through the Strait of Hormuz. The proposed framework includes the creation of a temporary joint maritime corridor and an agreement to execute a joint project for mine clearance in the waterway. However, the International Maritime Organisation said it has not received any information regarding the current status of mines in the Strait of Hormuz. This comes as anecdotal evidence suggests there is an increasing flow of vessels utilising the Omani route through Hormuz. Axios reported around 40 ships transited the strait over the weekend. Persian Gulf producers including Iraq and Saudi Arabia have been using a shuttle system offered by the UAE to get oil through Hormuz. Prices dipped further following reports that the US would send diplomats back to Middle East embassies, suggesting they don’t anticipate a ramp-up of military action. That’s in line with the Trump administration’s strategy of applying economic pressure to bring Iran to the negotiating table. However, they stopped short of imposing secondary sanctions on nations dealing with Iran, including China.

Signs of diplomatic progress in the Middle East also weighed on natural gas prices in Europe and Asia. European natural gas benchmark futures fell as much as 4.4% on hopes of a resumption of gas flows from the Persian Gulf. Gas users have been concerned that the disruptions to supply, combined with increased demand from Asia will limit its ability to refill storage facilities before the winter heating season. On current injection rates, they will enter the season with facilities only 75% full. Despite today’s fall, European gas is still up more than 20% this month and more than double levels seen prior to late February. North Asia LNG prices were relatively unchanged, despite the ongoing supply disruptions pushing more Asian buyers to scour the spot market.

Copper led the base metal sector higher, as the recent shifts in currency and bond markets boosted investor appetite. Last week’s bond market announcement by the US Treasury has helped boost metals by weakening the USD. The physical market remains tight, with persistent supply side issues exacerbated by robust demand. China’s smelters are having to increasingly rely on copper scrap as a feedstock amid copper concentrate constraints. Scrap accounted for 25.2% of feedstock in H1 2026, up from 22.6% a year earlier. Traders are also on alert for more withdrawals of metal from LME warehouses. Requests to withdraw metal jumped by 54.1kt to 121.4kt, the biggest increase since May.

Gold edged higher. US Treasury Secretary Bessent did not give any further signals on the announced changes to the country’s debt management. This followed reports that his department could drawdown some of its cash pile to fund buybacks of higher yielding older securities. However, last week’s announcement has revived concerns of US fiscal policy and USD weakness. The gains were limited, as the market waits for Fed Chair Warsh to clarify his view on when the central bank is likely to react to inflation when he speaks at the annual Jackson Hole gathering this Friday.

Chart of the Day

Tight conditions in the zinc market have emerged this year amid concerns that mine output is struggling to keep up with demand. Processing fees for the metal slumped to minus USD110/t this month, putting pressure on smelters. And LME stockpiles are also low by historical standards, at below 100kt.

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Summary

Energy fell amid mixed messages over supply disruptions. Precious metals extended gains as US fiscal concerns mounted.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None

• Central bank speakers: RBA Head of Domestic Markets David Jacobs speaks, Sydney

• Economic data: Australia RBA meeting minutes; Germany GDP, IFO business climate; Hungary rate decision; Hong Kong trade; Mexico international reserves; South Korea consumer confidence; Sweden Riksbank meeting minutes; Taiwan industrial production; US new home sales (10:00am NY / 3:00pm UK / 12:00am AEDT), Conference Board consumer confidence (10:00am NY / 3:00pm UK / 12:00am AEDT), FHFA house price index (9:00am NY / 2:00pm UK / 11:00pm AEDT), ADP weekly employment change (8:15am NY / 1:15pm UK / 10:15pm AEDT)

• Commodities reports: API weekly US oil inventories (4:30pm NY / 9:30pm UK / 6:30am AEDT)

• Events: South Carolina Republican Senate runoff primary; Oklahoma runoff primaries; Jefferies Semiconductor, IT Hardware & Communications Technology Conference, Chicago (through 26 Aug); ONS International Energy Conference, Stavanger

• Market data: Brent October options expiry

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices fell. The prospect of a peace deal that could ease constraints on Persian Gulf oil producers has continued to fade, as Iran and the US remain well apart on key issues. The market was unimpressed with Bessent’s announcement on an “unprecedented” campaign to isolate Iran from the global economy. He warned that any state doing business with Iran risks sanctions. However, there was no specific timeline on actions or plans.

Persian Gulf producers have partially offset the impact of the Strait of Hormuz disruption by relying on alternative export routes, but these remain fragile. Houthi threats in the Bab el-Mandeb Strait are weighing on traffic through the Red Sea, Yanbu loadings are depressed and ‘dark fleet’ activity highlights the growing security risks around Persian Gulf exports. This was highlighted when Yemen’s Houthi militant group targeted a Saudi oil tanker sailing through the Red Sea only 63 nautical miles from the Yanbu port. There are signs that higher oil prices could continue to reduce demand. China’s top oil refiner, Sinopec said gasoline consumption fell almost 8% and diesel by 12% in the first half of the year because of high oil prices and increased use of electric vehicles.

Traders in natural gas markets in Europe and Asia are still concerned about Middle East supply disruptions, with prices pushing higher in both regions. European gas rose as the market comes to realise that storage buffers will play a limited role this winter. The concerns are especially acute in Germany, which has the region’s largest storage capacity. Its inventories are about 51% full, a record seasonal low. The supply disruptions continue to lure buyers into the spot market in Asia.

Gold rose to a three-month high, as concerns over a US debt crisis have resurrected the debasement trade that fuelled gold’s rally in 2025. Gold-backed ETFs added more than 28t last week, the most since January, according to Bloomberg data.

Copper edged higher on signs that the recent inflow of inventory into LME warehouses was coming to an end. Requests to withdraw metal jumped by 54.1kt to 121.4kt, the biggest increase since May. These stoked fresh concerns of supply shortages. LME stockpiles have fallen nearly 50% over the past four months. Part of this drawdown has been due to US consumers becoming increasingly concerned that the White House will implement a tariff on imports.

Iron ore climbed to its highest level in nearly a month on rising steel marking costs. Coking coal, a key steel making ingredient, is in short supply in China following a deadly mine explosion in May. The prospect of mills restocking ahead of China’s National Day holidays also supported prices.

Chart of the Day

Saudi Arabia’s East-West Pipeline has been one of the most important routes in preventing a much larger disruption to global oil supplies. It has been operating close to emergency capacity during periods of heightened disruption, but capacity limits at Yanbu port have meant exports have averaged just under 4mb/d over the past two months. Houthi rebels are now threatening vessels transiting the Bab el-Mandeb Strait, so exports leaving Yanbu are at risk. From a high of 20 in July, the seven-day moving average of transits of this strait fell to 9 in mid-August. Further attacks by the Houthis will likely keep shippers cautious about returning.

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Summary

Energy gained amid fears of extended disruptions to supplies. Precious metals rallied as a weaker USD boosted investor sentiment.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Ukraine Independence Day

• Central bank speakers: Riksbank Deputy Governor Aino Bunge panel discussion on private capital markets, Stockholm

• Economic data: Mexico GDP, bi-weekly CPI; New Zealand retail sales; Nigeria GDP; Singapore CPI; Taiwan unemployment

• Commodities reports: None

• Events: ONS International Energy Conference, Stavanger (through 27 Aug); Stifel Tech Executive Summit, Utah (through 25 Aug)

• Market data: None

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices rose sharply last week as expectations of a near-term resolution to the Middle East conflict faded. The US administration reiterated its strategy of using economic pressure to draw Iran back to the negotiating table. Treasury Secretary Bessent said details would be announced this week. There is growing concern that any measures could target not only Iran but also countries that continue trading with the Islamic Republic. China responded by arguing that sanctions would not work and called for a diplomatic resolution. However, the market remains unconvinced, given Iran’s long history of enduring sanctions without capitulating.

What is clear is that confidence in a near-term agreement to reopen the Strait of Hormuz remains low. Persian Gulf producers have found alternative routes to international markets. Saudi Arabia is exporting more crude via Red Sea terminals after the Houthis announced a blockade, while other producers are using smaller tankers in shuttle operations to bypass restrictions. Nevertheless, the prospect of Hormuz remaining under Iranian control suggests regional oil flows could remain be for an extended period.

The situation is compounded by disruptions to fuel supplies elsewhere. Ukraine has continued to target Russian refineries, with drone attacks restricting production and creating severe domestic shortages. In response, the government has banned exports of most types of road fuels. These disruptions have intensified already tight diesel market conditions. Refining margins in the US recently surged to around USD100/bbl, while retail diesel prices climbed above USD5.55/gallon.

The lack of progress towards a Middle East peace deal also pushed natural gas prices higher in Europe and Asia. North Asian LNG is trading at roughly double its pre-conflict level and is likely to remain elevated while flows through the Strait of Hormuz are heavily restricted. Higher prices have done little to deter Asian buyers, with demand continuing to improve. Bangladesh is reportedly seeking three shipments for August and September delivery, while Thailand is looking for October shipments. European gas prices recorded a second consecutive weekly gain as traders assessed the challenge of replenishing storage while Asian buyers attract LNG away from Europe. Storage levels currently stand at just 62%, leaving the region increasingly dependent on a mild winter to limit heating demand.

Gold rose to its highest level in three months after the US Treasury’s intervention triggered concerns about the country’s fiscal position. The anticipated buyback of longer-dated government debt also pushed bond yields lower and weighed on the USD. The shift prompted investors to increase their exposure to the precious metal. Gold-backed ETFs recorded their largest daily inflow since September 2025 and extended their run to five consecutive weeks of net inflows.

Base metals moved higher last week, as the weaker USD boosted investor appetite. Copper remained the focus amid shifts in global inventories. A surge in deliveries into LME warehouses helped ease the market’s most acute tightness. Nevertheless, concerns over import tariffs mean the US could still draw additional metal from international markets. Zinc prices also gained as supply conditions tightened further, with treatment charges falling to negative USD110/t.

Chart of the Day

One would be forgiven for thinking the worst is over for the oil market. Brent crude has traded in that USD85-90/bbl over the past month, despite the memorandum of understanding collapsing and Iran’s grip on the Strait of Hormuz strengthening. Our oil market fundamentals expectations index suggests oil market’s are much tighter than what the flat price suggests. It has recently pushed to 1.25, which is at the top end of the “tightening fundamentals” range of 0.5-1.5. This would be normally associated with prices around USD100/bbl.

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Summary

Energy pushed higher amid a lack of signs of any reopening of the Strait of Hormuz. Precious metals rose on rising investor appetite. Industrial metals were mixed.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Philippines holiday.

• Central bank speakers: None scheduled.

• Economic data: Canada: retail sales; Eurozone: S&P Global Manufacturing PMI, consumer confidence, ECB CPI expectations; France: S&P Global Manufacturing PMI; Germany: S&P Global/BME Manufacturing PMI; India: HSBC Manufacturing PMI; Japan: CPI, S&P Global Manufacturing PMI; Macau: GDP; New Zealand: trade; South Korea: PPI; UK: budget statement, retail sales, S&P Global Manufacturing PMI; US: S&P Global Manufacturing PMI (NY 09:45 / UK 14:45 / AEDT 23:45).

• Commodities reports: China weekly iron ore port stockpiles; Shanghai Futures Exchange weekly commodities inventories (~NY 03:30 / UK 08:30 / AEDT 17:30); Baker Hughes weekly rig count (NY 13:00 / UK 18:00 / AEDT 03:00 Sat); CFTC Commitments of Traders (NY 15:30 / UK 20:30 / AEDT 05:30 Sat); ICE Futures Europe Commitments of Traders (NY 13:30 / UK 18:30 / AEDT 03:30 Sat); LME inventory and warrant data (~NY 04:00 / UK 09:00 / AEDT 18:00); SHFE warrant change data.

• Events: BloombergNEF Summit New Delhi, “The Future of Energy and Mobility”; Rimini Meeting in Italy begins (to 26 Aug); sovereign ratings reviews for Kazakhstan, Poland and Armenia; BHP-related metals sector earnings including China Hongqiao, Zijin Mining, Baoshan Steel, Jiangsu Shagang.

• Market data: None.

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices extended recent gains as the US pushes to increase economic pressure on Iran. Brent climbed to its highest levels in almost a month after President Trump announced a series of measures that could mean any country that conducts business with Iran may face economic consequences. The details of such measures have not been released and it’s hard to imagine there are any that Iran hasn’t already endured. It is unlikely to include targeting Iran’s oil sales, as that may risk a fresh confrontation with China just before Trump is due to meet China’s President Xi in the US next month. What is clear is that there is considerable doubt on a near-term deal to reopen the Strait of Hormuz. While Persian Gulf producers have been getting oil to the international market via alternative routes, the prospect of Hormuz remaining under Iran’s control would see oil flows remain restricted for the foreseeable future. This includes the US blockade of Iran’s ports. Iran’s central bank governor, Abdolnaser Hemmati, told state media yesterday that the nation’s oil exports have virtually stopped.

The impact on refined petroleum products remains severe. US distillate inventories fell once again last week to their lowest level since the end of July. Nationally, distillate supplies remain at their lowest seasonal levels since 1996. This is being compounded by ongoing disruptions to Russian supply. Ukraine has continued to hit major refiners in Russia. The latest was Taneco oil processing facility, which has a capacity of 300kb/d of petroleum products. The country now faces a second wave of gasoline shortages. The attacks have also tightened global diesel supplies.

European natural gas surged to a five month high, as the market faces extended disruptions to Middle East supplies. As the conflict drags on, the regions storage facilities continue to fall behind its target of reaching 80% full by the start of the heating winter season. They currently sit at 62%, the lowest seasonal level in records going back to 2009. North Asia LNG prices also gained as byers continue to worry about the availability of cargoes. The liquified gas is now trading at over USD22/MMBtu, the highest level since the Middle East conflict began. Despite the record high prices, smaller importers continue to seek LNG in the spot market. Bangladesh is said to be seeking three shipments for August and September delivery. Thailand is also looking for cargoes for October.

Gold broke above USD4,500/oz on the prospect of the US Treasury continuing to try to keep longer date bond yields under control. Following this week’s bond purchases, Bessent said the current yields don’t reflect the underlying fundamentals. The move also brought back into focus the US’s burgeoning debt, which reached a record USD40trn this week, according to Treasury department data. The moves have also weighed on the USD, which has boosted investor appetite

The influx of copper into LME warehouse continued to weigh on prices. After hitting a critically low level last week, there has been 72kt of the metal flow into the warehouse so far this week. This has pushed levels back to their highest since 13 July and helped cool the market’s most acute stress. Nevertheless, spreads are high. The premium on copper for immediate delivery over the three-month futures contract eased to about USD225/t, down from as much as USD545/t, but well above normal levels.

Chart of the Day

The cost of purchasing a crude tanker has sky rocketed to over USD180m, according to VesselsValue Ltd. This is up 35% from the start of the year and more than double the price from five years ago. The surge is being driven by oil-exporting countries looking to secure their own fleet of ships to get cargoes out were partly driving prices, especially for readily available second-hand ships and charters.

5in5 with ANZ Podcast

Summary

Energy gained as supply disruptions persist. Gold surged as weaker bond yields boosted investor appetite. Sentiment was also boosted by a weaker USD.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None.

• Central bank speakers: ECB Governing Council member Olaf Sleijpen speaking in Paramaribo, Suriname.

• Economic data: Australia: Unemployment rate; China: loan prime rates; Denmark: GDP; Hong Kong: CPI, unemployment; Japan: trade, foreign bond buying; Malaysia: trade; Mexico: central bank minutes; Sweden: rate decision; Taiwan: export orders; US: initial jobless claims (NY 08:30 / UK 13:30 / AEDT 22:30), Philadelphia Fed business outlook, Conference Board leading index (NY 10:00 / UK 15:00 / AEDT 00:00 Fri).

• Commodities reports: Singapore weekly onshore oil-product stockpiles; Insights Global weekly ARA oil-product inventories; EIA weekly US natural gas inventories (NY 10:30 / UK 15:30 / AEDT 00:30 Fri); China third batch of trade data including country-level energy and commodities trade; LME inventory and warrant data (~NY 04:00 / UK 09:00 / AEDT 18:00); SHFE warrant change data.

• Events: Alibaba earnings; Walmart earnings; BMW Championship begins (to 23 Aug).

• Market data: WTI September futures expiry.

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices continued to push higher as rising tensions in the Middle East threatened to disrupt oil flows even more. The United Arab Emirates said that it was cutting all economic ties with Iran after it accused it of firing ballistic missiles at its territory. This is the first exchange since the earlier stages of the current Middle East conflict. While UAE’s energy infrastructure was not targeted, it closes another potential avenue for diplomatic efforts to end the conflict and reopen the Strait of Hormuz. This latest event has kept risks to shipping in the region at elevated levels. Three supertankers linked to China and originally headed out of the Persian Gulf turned around in the Strait of Hormuz yesterday. The prospect of the conflict persisting has weighed on sentiment. President Trump insisted there are no talks ongoing with Iran to end the conflict.

Meanwhile, tightness in the refined fuel markets is worsening. US distillate inventories fell again last week, down 1.5mbbl to their lowest level since the end of July. Nationally, distillate supplies remain at their lowest seasonal levels since 1996, as the winter heating season nears. The tightness has pushed refining margins above USD100/bbl. US refinery runs have subsequently risen to their highest level since 2019. Overall, US crude oil inventories rose last week by 4,405kbbl. This was offset by a drawdown in the US Strategic Petroleum Reserve of 5,268kbbl.

North Asia LNG prices gained as byers continue to search for cargo amid the supply disruptions in the Middle East. Bangladesh is said to be seeking three shipments for August and September delivery. Thailand is looking for shipments for October. China has ramped up imports. Official data show July imports of LNG rose 2.4% y/y to 5.5mt. The July increase follows an 8.3% y/y rise in June.

Gold surged as US government bond yields fell following its surprise liquidity injection. This was triggered by the announcement that the US Treasury was ramping up its buyback of long-dated government debt, a signal that it wants lower borrowing costs. The move would suggest we may ultimately see easier financial conditions, a backdrop which usually supports higher gold prices. Gold was already improving, having briefly touched USD4,000/oz last month before rebounding strongly on the back of renewed investor demand and central bank buying. The improving backdrop has seen gold-backed ETFs receive strong inflows. Holdings rose by more than 257koz on Tuesday, the biggest daily inflow since April, according to Bloomberg data. Other precious metals joined the ride, with silver gaining more than 4%, while platinum rallied nearly 6%.

The base metals sector gained as the bond buyback weakened the USD and boosted investor appetite for commodities. This was despite another day of strong builds in inventories. The current squeeze in the copper market is easing after large inflows of metal into LME warehouses. Inventories on warrant rose by more than 35kt, the most since 2024, according to LME data. That followed an increase of more than 20kt the previous session. Prior to this influx, inventories had fallen by about 75% from a mid-April high. This should relieve pressure that had been building on LME contracts, which underpin most global trade. Nevertheless, concern about US import tariffs on refined metal will hang over the market, which is still waiting for the results of a US investigation into the copper industry that could see levies applied to imports

Chart of the Day

US inventories of distillate fell further last week and now sit around 20mbbls below the 10 year seasonal average. With inventories depleted and supply buffers limited, diesel markets remain highly sensitive to further disruptions. Seasonal refinery maintenance in September and October is set to coincide with stronger agricultural, industrial and heating demand, creating another headwind for supply. While crude markets are gradually adjusting to the disruption in Persian Gulf supply, diesel availability is likely to recover more slowly. As a result, diesel cracks should remain elevated even if outright oil prices retreat.

5in5 with ANZ Podcast

Summary

The energy sector edge up as Middle East supply remains disrupted. Precious metals fell on higher bonds yields and a stronger USD.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None.

• Central bank speakers: ECB President Christine Lagarde panel on the global economic outlook at the World Economic Forum in Geneva; RBA Deputy Governor Andrew Hauser at Queensland Futures Institute Annual Regions Summit (Brisbane).

• Economic data: Australia: wage price index; Eurozone: CPI (NY 05:00 / UK 10:00 / AEDT 19:00); Iceland: rate decision; Indonesia: rate decision; Japan: machinery orders; New Zealand: PPI; Philippines: balance of payments; South Africa: CPI, retail sales; UK: CPI, house price index; US: FOMC meeting minutes (NY 14:00 / UK 19:00 / AEDT 04:00 Thu), mortgage applications; China: output data for base metals and oil products.

• Commodities reports: EIA weekly US oil inventories, supply and demand (NY 10:30 / UK 15:30 / AEDT 00:30 Thu); Genscape weekly ARA crude inventory report (NY 04:00 / UK 09:00 / AEDT 18:00); LME inventory and warrant data (~NY 04:00 / UK 09:00 / AEDT 18:00); SHFE warrant change data.

• Events: Washington’s 50% tariff on selected Canadian goods due to take effect; Chinese Foreign Minister Wang Yi visit to South Korea (to 20 Aug); Hungarian President-elect Andras Baka takes office; AI Summit Seoul & Expo begins (to 21 Aug); World Robot Conference Beijing continues (to 23 Aug); EnerCom Denver concludes; Target earnings; Lowe’s earnings; Santos 1H earnings.

• Market data: WTI September calendar spread options expiry.

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices edged up as renewed attacks in the Middle East raise the prospect of ongoing disruptions to supply. Ships transiting the Strait of Hormuz continue to contend with threats. A vessel was attacked exiting the strait causing engine room damage, according to the UK Maritime Trade Operations. The United Arab Emirate said its air defence systems had detected a missile threat targeting the country. This comes as the US continues to take a hardline against Iran. President Trump threatened to bomb Oman if it got in the way of a US blockade of Iranian ports. He also said he’s not interested in extending the expiring agreement with Iran that had promised to lead to a permanent deal to end the Middle East conflict. Instead, the risks of a further flare up remain high.

The gains were limited by signs that some oil is still getting through the strait. Saudi Arabia is said to be offering to sell oil off the coast of Oman, a sign that the kingdom may be shuttling barrels through the key waterway. UAE’s state oil giant, Abu Dhabi National Oil Co, said that despite its vessels being targeted, it is determined to safely deliver energy to global energy markets and to meet our customer commitments as much as possible. Ship tracking data from Bloomberg shows that daily crossings have slumped to single digit levels in recent days. However, oil tankers have been turning transponders off the make the journey undetected in increasing numbers in recent weeks.

European natural gas futures extended gains as the prospect of resumption of LNG flows through Hormuz receded. Continued disruptions are hindering Europe’s efforts to rebuild inventories ahead of the winter heating season. Storage facilities are just 61% full, the lowest seasonal level in records going back to 2009. North Asia LNG also edged up on diminishing prospects of the Strait of Hormuz reopening. This has led some exporters to look at other ways of exporting the fuel from the Persian Gulf. Two tankers were recently seen on satellite imagery conducting ship-to-ship transfer outside the key waterway.

Copper led the base metals sector lower, as a sudden influx of metal into warehouses eased concerns of physical tightness. The London Metal Exchange’s global warehouse network saw the biggest increase in readily available copper inventories since April, with a gain of more than 20,000t. This saw the spread between spot copper and the 3mth future contract fall from USD545/t on Monday to USD248/t. Traders have been watching copper, as a surge of shipments to the US had reduced LMG stockpiles which underpin the global benchmark contracts. That inventory shift has been driven by the prospect of US import tariffs. The market is still waiting for the results of a US report into the copper industry that was completed in July. In China, elevated copper prices have curbed buying appetite. Inventories in Shanghai have been steadily rising over the past weeks to around 80,000t, according to data from Shanghai Metals Market.

Gold came under pressure, as a selloff in bonds sent yields higher and buoyed the USD. Rising Treasury yields increase the opportunity cost of holding a non-yielding asset such as gold. Higher energy prices raised concerns that inflation may prompt the Fed to keep rates elevated for an extended period. This places greater emphasis on the Fed’s next policy meeting. Chair Warsh is scheduled to speak at the annual Jackson Hole symposium later this month.

Chart of the Day

Data released this week showed that China’s steel output hit its lowest level this year. July’s production reached only 76.9mt, down 3.6% y/y. For the first seven months of the year China produced 577.04mt, down 3.1% from the same period a year earlier. The falls came predominately from the construction sector, which accounts for nearly a third of China’s total steel demand. However, other sectors showed positive improvements. Demand from the auto sector is being buoyed by strong overseas demand, particularly for China EVs. The technology sector is also provide some support. Overall, the picture is more nuanced than what the headline figure suggests.

5in5 with ANZ Podcast

Summary

The energy sector gained, as the prospects of a US-Iran peace deal waned. Precious metals rose on a weaker USD. Weak economic data weighed on industrial metals.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None.

• Central bank speakers: ECB Chief Economist Philip Lane panel on monetary policy at the European Economic Association annual congress in Dublin.

• Economic data: Australia: Westpac consumer confidence; Canada: housing starts; Chile: GDP; Colombia: GDP; Germany: ZEW expectations survey; Spain: trade; UK: unemployment rate, average weekly earnings; US: housing starts, industrial production (NY 09:15 / UK 14:15 / AEDT 23:15), import-export price indexes, pending home sales, ADP weekly employment change (NY 08:15 / UK 13:15 / AEDT 22:15); Uruguay: rate decision; China: second batch of trade data including alumina exports, rare-earth exports, steel product imports, aluminium product imports, oil products imports and exports, LNG imports, pipeline gas imports.

• Commodities reports: API weekly US oil inventories (NY 16:30 / UK 21:30 / AEDT 06:30 Wed); LME Commitments of Traders report on metals positions; LME inventory and warrant data (~NY 04:00 / UK 09:00 / AEDT 18:00); SHFE warrant change data.

• Events: Ukrainian parliament voting on new government appointments begins (to 21 Aug); Alaska, Florida and Wyoming primary elections; Bloomberg New Voices event on Martha’s Vineyard; EnerCom Denver continues; BHP earnings; Home Depot earnings; Rusal earnings; Huayou Cobalt earnings; SQM earnings.

• Market data: None.

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices rose on fading hopes of a peace deal between the US and Iran. Talks appear to be at a standstill, as the 60-day truce expired on Monday. Trump said he’s not seeking to extend the memorandum of understanding signed in June and warned that he’s in no hurry to end the conflict, citing pressure from the US naval blockade on the Islamic Republic. US Energy Secretary, Chris Wright, told Fox News that the US is playing the long game with Iran, implying the administration has no imminent plans for de-escalation. Those comments came after Trump threatened to attack Oman if it gets in the way of the US blockade on Iranian ships. Oman and Iran appear to be edging closer to a deal on how the Strait of Hormuz should be managed. However, without a US involvement in those talks, it’s unlikely it will lead to the full restoration of oil flows through the key waterway.

The prospect of lingering supply disruptions lifted natural gas prices in Europe and Asia. Europe is under pressure to refill its storage facilities before the heating season. They currently sit at only 60% full, compared with the five-year seasonal norm of 78%. The prolonged disruption is also prompting some Asian nations to see more cargoes to replace Qatari volumes. Bangladesh is seeking five shipments for August and September, while Indian importers have also been active.

Weaker-than-expected economic data in China weighed on sentiment across the base metals sector. Fixed asset investment fell 6.7% y/y ytd following a disappointing H1 (-5.7%), dragged down by continued weakness in property investment (-19.2%) and infrastructure (-3.6%). Domestic consumption was weak, with retail sales growing just 0.6% y/y in July, below market expectations. One of the rare positives was industrial output technology and advanced manufacturing sectors continued to outperform, with production of industrial robots (+30.2% y/y) and new-energy vehicles (+29.9% y/y) posting strong growth. This came after signs of softening demand. Copper premiums on imports into China fell back last week in a possible sign that buyers are balking at higher prices. Earlier in the session, copper prices surged as a surge in US imports continues to tightness elsewhere. Traders remain concerned about a potential decision to impose tariffs. Spot prices traded as much as USD545/t above the 3mth futures contract, the highest level since a historic squeeze in 2021.

Iron ore prices were also under pressure following data that showed Chinese steel production tumbled last month. Steelmakers pushed out only 76.93mt in July, down 3.6% y/y. That was the weakest monthly total for 2026, according to the National Bureau of Statistics. Output over the first seven months of the year was down 3.1% y/y. However, the weak data increased the likelihood of additional stimulus. GDP grew only 4.3% y/y in Q2. The July Politburo meeting called for enhancing counter-cyclical policy adjustment.

Gold extended recent gains as easing expectations of Fed rate hikes put downward pressure on the USD. A trade-weighted gauge of the USD hit its lowest level since May, making gold cheaper for many buyers. This has triggered renewed investment demand. Gold-backed ETFs recorded their first monthly inflow in July for four months. This has been aided by strong central bank buying. Second quarter purchases remained strong at 289t.

Chart of the Day

Central bank buying should keep a solid floor gold demand. Poland and China have been key buyers, adding gold on price weakness. However, the buyer base is broadening. South Korea’s central bank bought gold-linked assets for the first time since 2013. We expect future growth in official-sector demand to be driven increasingly by new buyers. Given weaker-than-expected central bank demand of 345t in H1, we have lowered our full-year forecast to 820t from 950t.

5in5 with ANZ Podcast

Summary

The energy sector gained as US-Iran peace talks stalled. Precious metals rose on easing expectations of Fed rate hikes. Industrial metals edged up on supply concerns.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: South Korea (Liberation Day observance); Indonesia Independence Day holiday.

• Central bank speakers: ECB Chief Economist Philip Lane panel on Europe’s defence buildup at the European Economic Association annual congress in Dublin.

• Economic data: Canada: CPI; China: Retail sales, Industrial production, fixed asset investment, property prices, steel output, aluminium output, coal production, gas production, power generation, crude oil production, refining output, property investment, residential property sales, jobless rate; Israel: unemployment; Japan: GDP, industrial production, tertiary industry index; Malaysia: CPI; New Zealand: food prices; Nigeria: CPI; Philippines: overseas remittances; Singapore: trade; Thailand: GDP; US: cross-border investment, Empire State manufacturing survey (NY 08:30 / UK 13:30 / AEDT 22:30).

• Commodities reports: Angola crude loading programme for October due; LME inventory and warrant data (~NY 04:00 / UK 09:00 / AEDT 18:00); SHFE warrant change data (after market close).

• Events: India Prime Minister Narendra Modi Independence Day address; Thailand-US Trade & Investment Summit (Bangkok); South Korea-US Ulchi Freedom Shield military drills begin (to 27 Aug); Wyoming Blockchain Symposium begins (to 20 Aug); EnerCom Denver begins (to 19 Aug).

• Market data: WTI September options expiry.

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices rose last week with little sign that the US and Iran are nearing an agreement to reopen the Strait of Hormuz. Instead, the US intends to pressure Iran by applying economic pressure. This will include measures that have never been seen before, according to Treasury Secretary, Scott Bessent. In the meantime, the US will maintain its naval blockade of Iranian ports in an effort to force the reopening of the key waterway. Iran has weathered sanctions and financial strain in the past without relenting on its desires to develop nuclear program or relinquish its control over the Strait of Hormuz. Talks continue between Oman and Iran around the management of the strait, but they have yet to strike a deal that would allow freer passage of vessels. Attacks on vessels continued. Abu Dhabi National Oil Co, which has been one of the most successful producers in getting crude out of the Persian Gulf, said two of its ships were attacked late last week. Earlier in the week the Iranian-backed Houthi militant group attacked the Saudi Aramco’s oil refinery in Jazan on the Red Sea Coast. That is the second such attack by the group on the refinery in less than a week

Even if crude oil supply eventually recovers, diesel markets are likely to remain constrained by refinery outages, damaged infrastructure and depleted inventories. Refining capacity, rather than crude availability, has become the critical bottleneck for global fuel markets, leaving middle distillates particularly exposed. Limited spare refining capacity, seasonal maintenance and strong freight demand should keep diesel margins elevated even as broader oil markets stabilise.

Natural gas prices in Europe and Asia rose sharply last week as the prospect of the Strait of Hormuz reopening faded. With the US showing little sign of relenting on its demand that the waterway be free from Iranian control, the return of LNG tankers transiting the waterway will remain elusive.

Gold’s price rebounded to above USD4,400/oz last week as improving market sentiment supported the move. Weaker-than-expected US labour data and softer inflation prints eased concerns that the Federal Reserve will need to stay aggressively hawkish. Recent data suggest hawkish market pricing may have peaked, while breakeven inflation expectations remain anchored near 2%. Softer hiring trends, evidence that the labour market is a disinflationary force and cooling inflation have helped gold find support near USD4,000/oz. The joint intervention by the US and Japan to support the JPY has raised questions about the reliability of traditional haven currencies. This has again put the spotlight on gold as a reserve asset and hedge against currency devaluation. Short-term risks remain. Resilient US data and higher oil prices could keep inflation concerns alive, while markets continue to price a relatively hawkish Fed path. We therefore remain cautiously optimistic in the short term.

The rally in base metal markets paused last week as investors assess possible downside risks. Aluminium and nickel ended the week lower, while copper was relatively unchanged. China is set to release key economic data including industrial activity this week. Copper premiums on imports into China fell back last week in a possible sign that buyers are balking at higher prices.

Chart of the Day

Refinery disruptions across the Persian Gulf have reduced the production and export of diesel, while global industrial, freight and agricultural demand proved relatively resilient. That reduced production is largely due to damage inflicted on the region’s major oil refineries during the peak of the Middle East conflict. Attacks have affected refining complexes representing more than 3.8mb/d of capacity across Saudi Arabia, Kuwait, Bahrain and the UAE, including several facilities that are critical suppliers of diesel and other middle distillates to international markets

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Summary

Energy fell as oil supplies find their way out of the Persian Gulf. Precious metals fell on profit taking. Industrial metals edged higher on supply concerns.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Pakistan

• Central bank speakers: RBA Governor Michele Bullock appears before House of Representatives Standing Committee on Economics in Canberra

• Economic data: Bulgaria GDP; Eurozone GDP and unemployment; Finland CPI; France CPI; Hong Kong GDP; India wholesale prices; Israel CPI; Macau GDP; Malaysia GDP; New Zealand BusinessNZ manufacturing PMI; Poland GDP and CPI; Taiwan GDP; US retail sales, business inventories and University of Michigan consumer sentiment

• Commodities reports: China weekly iron ore port stockpiles; Shanghai Futures Exchange weekly commodities inventory (~2:30am NY / 7:30am UK / 4:30pm AEDT); Baker Hughes weekly rig count (1:00pm NY / 6:00pm UK / 3:00am AEDT Sat); CFTC commitments of traders report (3:30pm NY / 8:30pm UK / 5:30am AEDT Sat); ICE Futures Europe commitments of traders report (1:30pm NY / 6:30pm UK / 3:30am AEDT Sat); LME inventory and warrant data (4:00am NY / 9:00am UK / 6:00pm AEDT); SHFE warrant change data

• Events: SEC 13F filing deadline for institutional investors; Indonesian President Prabowo Subianto addresses joint session of parliament; Australian Parliamentary Joint Committee hearing on ethics and professional accountability at KPMG Australia; Disney D23 convention opens in California; Sovereign ratings reviews for UK, Austria, Angola and Lebanon

• Market data: None scheduled

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil prices fell as traders weighed up the limited progress of talks on reopening the Strait of Hormuz with signs of oil flows rising. Earlier this week US Energy Secretary, Chris Wright, said flows have averaged 9mb/d over the past week, well above what ship tracking data suggest. Persian Gulf producers such as the UAE and Saudi Arabia are said to be doing what they can to keep exports flowing, including switching transponders to move cargo through the strait without detection. This has led to an increased amount of crude from the Middle East finding its way to the US. At least 9mbbl are set to arrive at US ports in August, according to maritime analytics firm Kpler. This comes as US imports from Venezuela rise to their highest in nine years.

However, oil pared back some of the earlier losses after reports emerged that the Iranian-backed Houthi militant group had targeted Saudi Aramco’s oil refinery in Jazan on the Red Sea Coast. It’s the second such attack by the group on the refinery in less than a week. Progress on talks to reopen Hormuz have also stalled. Both sides claim they have control of the waterway and are demanding concessions that are unlikely to be met, leaving a durable peace elusive. According to the International Energy Agency, the global oil market will subsequently face a shortfall of 1.8mb/d this quarter, more than double an earlier projection.

Natural gas in Europe and Asia followed crude oil lower, although the losses were more limited as buyers remain concerned about supply shortages. Indian importers bought more spot shipments of LNG as hopes of a deal to reopen Hormuz fade. North Asia LNG prices hovered around USD21/MMBtu. European natural gas futures remained above EUR60/MWh as the market struggles to refill depleted storage facilities.

Gold fell despite fears of further rate hikes easing. Soft US producer price inflation has reinforced bets that the Fed will refrain from raising rates next month. This follows consumer price inflation data earlier this week, that showed price pressures remain benign. However, the recent bounce from USD4,000/oz led to some investor taking profit after the precious metal broke through its 100-day moving average, a key technical resistance level.

The base metals sector was mixed as traders grappled with supply side issues and an uncertain economic backdrop. Aluminium fell for a second day on easing supply side concerns. Emirates Global Aluminium PJSC announced that it aims to lift output to pre-war levels in the first quarter of next year. This comes after its main smelter was hit by Iranian missiles in March. Nevertheless, signs of tightness remain supportive. Stockpiles held in LME warehouses are at their lowest level since 1990. The market is also facing rising costs that are making many current operations uneconomic. The Tomago smelter in Australia was forced to secure a AUD2.5bn government rescue package to allow the operations to continue. Copper managed to end the session higher as signs of tightness persist. The LME cash price is trading its highest premium to the 3month futures contract since late July. Supply disruptions also endure. Antofagasta PLC cuts its copper production guidance by around 50kt/y as it struggles to recover from storms in Chile that led to the government declaring a catastrophe in the semi-arid Coquimbo region.

Chart of the Day

China could once again step in to help tightness in the oil market. China banned fuel exports in early March, in order to safeguard the domestic market from the loss of Persian Gulf oil. However, energy supplies had stabilized enough for state-owned refiners to begin applying for permits to resume exports. Chinese oil refiners have subsequently been granted more permits to export gasoline, diesel and jet fuel this month, according to Bloomberg.

Exports have already been rising. July volumes of refined petroleum products hit 4.65mt, up from 3.1mt in April. Further gains could help ease tightness in diesel and gasoline markets that have resulted in refining margins surge higher in recent months.

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Summary

Precious metals gained as inflation data cooled expectations of rate hikes. Energy was relatively unchanged, as higher US inventories offset supply concerns.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None scheduled

• Central bank speakers: Richmond Fed President Tom Barkin speaks on economic outlook; Cleveland Fed President Beth Hammack speaks at Dayton Area Chamber of Commerce; RBA Assistant Governor Christopher Kent Reuters NEXT interview in Sydney

• Economic data: Argentina CPI; Eurozone industrial production; Israel trade; Japan PPI; Norway rate decision; Peru rate decision; Poland CPI; Serbia rate decision; Spain CPI; Sweden CPI and unemployment rate; Turkey current account; UK GDP, industrial production and trade balance; US initial jobless claims and US PPI (8:30am NY / 1:30pm UK / 10:30pm AEDT); Uganda rate decision

• Commodities reports: Singapore weekly onshore oil-product stockpiles; Insights Global ARA oil-product inventories; EIA weekly US natural gas inventories (10:30am NY / 3:30pm UK / 12:30am AEDT Fri); LME inventory and warrant data (4:00am NY / 9:00am UK / 6:00pm AEDT); SHFE warrant change dat

• Events: UK second-quarter GDP release; Clacton parliamentary by-election; Zambia presidential and parliamentary elections; International Space Station spacewalk; FedEx St Jude Championship begins in Memphis

• Market data: None scheduled

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Gold rallied as expectations of a rate hike were pared back following US inflation data. The precious metal was up as much as 1.6% to over USD4,400/oz as consumer prices in July rose only marginally from June. The data mean the Fed is likely to remain on hold at its next meeting, leaving the market pricing only a 40% chance of an interest rate hike. This continues the steady stream of data that have tempered expectations of monetary tightening and should provide further support for gold in the coming months. Investors have been steadily increasing their exposure in recent weeks. Gold backed exchange traded funds saw USD3bn of inflows in July, snapping two straight months of outflows.

Crude oil ended the session relatively unchanged, as concerns over ongoing supply disruptions were offset by a strong rise in US inventories. A deal to reopen the Strait of Hormuz remains elusive. Al Jazeera reported that talks between Iran and Oman have reached an advanced stage; but newly installed secretary of Iran’s Supreme National Security Council, Mohsen Razaee, said any agreement with Oman would be separate from discussions on a full reopening. He reiterated that the reopening will only happen if the US lifts its blockade of Iranian ports and Iran receives compensation for damage inflicted by US military attacks. Despite President Trump’s comments that he thinks the US has total control of the waterway, visible traffic is down to a trickle.

Oil prices did come under pressure after the US Energy Information Administration reported that US crude oil inventories rose by 17.4mbbl last week. This was nearly double the amount estimated by the industry group API earlier this week. This was the biggest weekly move in inventories since January 2023. The build was concentrated on the US Gulf Coast, due to softening export demand and a surge in imports. Those imports were predominantly from Venezuela, which soared to their highest levels in nine years. Tightness in the refined fuel markets has seen US exports of diesel notch up a new record high of nearly 2mb/d. Refiners continue to make near-record amounts of the fuel on a seasonal basis, while domestic demand remains at the lower end of seasonal norms.

Natural gas markets remained on edge with no end in sight to discussions to reopen the Strait of Hormuz. North Asia LNG prices rose as the US and Iran hardened their positions, dimming hopes of a quick resumption of gas flows through the waterway. The prospect of a colder-than-normal winter is raising concerns around market tightness in coming months. This comes as the El Niño weather system has left China’s rivers and dams so low that it could disrupt hydro-power supply. That would increase demand on natural gas as an energy source. European natural gas futures were up, as concerns persist over the refilling of depleted storage facilities before winter.

Copper edged lower as rising prices pushed Chinese buyers to the sidelines. The Yangshan premium slipped to USD96/t, after reaching USD115/t last month amid strong demand. This suggests higher prices have cooled demand in the world’s biggest consumer. Nevertheless, tightness across the market persists. Copper stockpiles in LME warehouses dropped for the 40^th consecutive day, the longest such streak since early 2014.

Chart of the Day

Venezuela crude oil exports have risen to their highest level in eight years as it benefits from the removal of US sanctions. Production climbed 11% y/y to 1.2mb/d in July, according to data from state-owned oil producers, PDVSA. US Refiners are buying more Venezuela’s heavy, sour crude oil to take advantage of wide discounts to sweeter crude oil grades such as WTI.

5in5 with ANZ Podcast

Summary

Mixed signals on a deal to reopen the Strait of Hormuz saw energy prices gain. Industrial metals rose on further supply side issues.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Thailand

• Central bank speakers: None scheduled

• Economic data: Germany CPI; India CPI; Italy CPI; Japan money stock and machine tool orders; Russia CPI and GDP; Saudi Arabia CPI; South Korea unemployment; US CPI (8:30am NY / 1:30pm UK / 10:30pm AEDT), federal budget balance and mortgage applications

• Commodities reports: Genscape ARA crude inventory report (4:00am NY / 9:00am UK / 6:00pm AEDT); IEA monthly Oil Market Report (4:00am NY / 9:00am UK / 6:00pm AEDT); OPEC Monthly Oil Market Report; EIA weekly US oil inventories, supply and demand report (10:30am NY / 3:30pm UK / 12:30am AEDT Thu); USDA WASDE world agricultural supply and demand report; LME inventory and warrant data (4:00am NY / 9:00am UK / 6:00pm AEDT); SHFE warrant change data

• Events: Norway sovereign wealth fund half-year results and press conference (5:00am NY / 10:00am UK / 7:00pm AEDT); Google “Made by Google” product launch in New York; July US CPI report in focus for markets; Total solar eclipse visible from Greenland, Iceland, northern Russia, Spain and Portugal

• Market data: ICE Gasoil August futures expiry

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Oil extended gains as the likelihood of a deal to reopen the Strait of Hormuz remain low. Pakistan’s defence minister said that the US and Iran are close to “some sort of arrangement” on Hormuz. Al Jazeera reported that talks between Oman and Iran had reached an advanced stage, but Iran insisted that the waterway will remain closed until the US meets its demands, which include the removal of a blockade of Iranian ports and compensation for damages inflicted by US military attacks. Meanwhile, skirmishes in the Middle East keep traders on edge. A US Navy helicopter fired missiles at a Panama-flagged cargo vessel that was attempting to transit the Gulf of Oman. A refinery in Libya was also targeted by a drone attack. The collapse of the US-Iran peace deal has seen oil flows from the Persian Gulf once again dry up. The Strait of Hormuz remains heavily constrained, with vessel traffic showing no meaningful recovery. The US blockade is also weighing on Iranian exports. Its oil terminals appeared largely idle this month, with no supertankers visible at Kharg Island, its main export terminal. Kpler estimates that exports are down roughly 40% this month compared with their average in July, to about 500kb/d.

Ongoing disruptions to Russian oil supplies are compounding oil market tightness. After a hiatus, Ukraine resumed drone attacks on Russian oil refineries. This has seen Russia’s crude shipments drop to their lowest level since May. Total exports fell to 3.71mb/d in the four weeks to 9 August, according to ship tracking data.

Natural gas prices in Europe and Asia were down early in trading on signs of a possible restart of exports from Qatar. The world’s biggest LNG exporter was loading the most LNG in months, with a 10-day moving average of loadings from the Ras Laffan complex of about 10kt. However, the eventual exports remain dependent on shipping conditions through the Strait of Hormuz. The subsequent warnings from Iran that Hormuz will remain closed until its demands are met saw those markets give back most of the losses by the end of the session. Europe’s LNG imports have been falling since April on the disruptions in the Middle East. That has put out of reach its target of refilling storage facilities back to 90% before the start of the heating season. A lower target of 70% remains a challenge. German’s Uniper SE said it can still be reached but that it remains reliant on a resolution in the Middle East conflict.

Traders in base metal markets were faced with a barrage of supply side issues. Aluminium prices rallied after Norsk Hydro said its Alunorte alumina refinery in Brazil cut its output to 50% due to natural gas supply shortages due to the closure of the Strait of Hormuz. Norsk Hydro warned last month that the annual supply shortfall may widen to more than 900kt if trade through the key waterway is not normalised. In Indonesia, copper shipments from the giant Grasberg mine were halted because of a boiler leak over the weekend.

Gold remained near a two-month high as traders look to the release of key US inflation data. This comes amid the backdrop of higher energy prices, as a deal to reopen Hormuz fades. Sentiment was supported by data showing strong buying from China’s central banks. The PBoC increased its gold reserves for a 21^st consecutive month in July, rising by 640koz to 76.08moz as of 13 July.

Chart of the Day

Global central banks accelerated buying in the second quarter, purchasing a record 289t, up 62% y/y. Poland’s central bank was the biggest buyer in the three-month period, accumulating 51t of gold, and the People’s Bank of China ranked second with a purchase of 33t. South Korea’s central bank also said that it would increase gold’s share of its foreign reserves, marking an end to a 13-year hiatus in purchases.

5in5 with ANZ Podcast

Summary

The energy sector rallied, as hopes of a reopening of the Strait of Hormuz faded. Precious and industrial metals gained as concerns of rate hikes eased.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Japan

• Central bank speakers: RBA Governor Michele Bullock press conference following rate decision and quarterly forecasts

• Economic data: Australia RBA rate decision, NAB business confidence; Brazil CPI and central bank meeting minutes; Italy trade; Kenya rate decision; Malaysia industrial production; Mexico international reserves and industrial production; Netherlands CPI; Russia trade; Singapore GDP; South Africa manufacturing production; US existing home sales and NFIB small business optimism

• Commodities reports: EIA Short-Term Energy Outlook (12:00pm NY / 5:00pm UK / 2:00am AEDT Wed); API weekly US oil inventories (4:30pm NY / 9:30pm UK / 6:30am AEDT Wed); LME commitment of traders report for metals positions; LME inventory and warrant data (4:00am NY / 9:00am UK / 6:00pm AEDT); SHFE warrant change data

• Events: Swiss parliamentary committee recommendation on UBS capital rules; Hungarian legislators meet to appoint presidential candidate; Australia national Census of Population and Housing; South Carolina special Republican primary; Primary elections in Connecticut, Minnesota, Vermont and Wisconsin

• Market data: None scheduled

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Oil rallied as a deal to reopen the Strait of Hormuz remains elusive. Iran said it was very close to reaching a deal with Oman, however it reiterated that it would require the US to remove its blockade of Iranian ports and is seeking compensation for damages inflicted by US military attacks. President Trump appeared reluctant to meet any of Iran’s demands, instead suggesting it should be responsible for the damages and casualties across Iran, Lebanon, Yemen and Gaza. He signalled that he’s prepared to let economic pressures on Iran build rather than launch fresh military strikes. Meanwhile, there were strikes on vessels near Hormuz, targeting an oil tanker operated by Abu Dhabi National Oil Co. Iran-backed Houthi militants in Yemen claimed an attack on Saudi Arabia’s Jazan refinery. The later could add strain to the already tight diesel market. The region is a key supplier of the fuel to global markets, and attacks on refineries have exacerbated the supply disruptions to crude oil. This has been exacerbated by Russia’s ban on diesel exports following Ukrainian attacks on its energy infrastructure.

This continues to weigh on the oil market. The Strait of Hormuz remains heavily constrained, with vessel traffic showing no meaningful recovery. Seven-day average inbound and outbound transits slipped further to just 0.6 and 0.3 vessels per day, respectively, leaving Persian Gulf exports under pressure. Iranian attacks on vessels continue to limit movement through the waterway. Alternative export routes are becoming increasingly vulnerable. Fujairah could emerge as a potential flashpoint, which could threaten roughly 4mb/d of exports from the UAE, Kuwait and Iraq. Houthi attacks on shipping in the Red Sea are also increasing risks to Saudi Arabia’s key alternative export corridor.

Natural gas prices in Europe and Asia pushed higher alongside oil as a deal to reopen Hormuz faded. As deliberations drag on, Europe is running out of time to refill its storage facilities before the peak demand period in winter. The continent has now less than three months, however storage levels remain at their lowest seasonal level of 59% since records began in 2009. This saw European benchmark futures surge more than 10%. Gains in North Asia LNG prices were a little smaller than European prices, as some buyers pulled back from the spot market.

Copper held onto gains as concerns of tighter monetary policy eased. Last week’s weaker than expected jobs data in the US has seen expectations of rate hikes fall sharply. Higher rates tend to hit industrial metals by weighing on economic growth. However, support for metal has gained as more signs emerge of increasing tightness in the physical market. The cash contract on the LME has jumped to a higher premium over the 3mth futures prices since October. This comes as inventories across the world continue to fall. Most of these drawdowns have been due to US traders importing metal before a possible tariff is introduced.

Iron ore prices found a little support from supply side issues. More workers have joined a strike at the Port Hedland iron ore export hub in Western Australia. While vessels continue to load, risks of future disruptions are mounting. Nevertheless, signs of demand weakness in China have seen prices fall below USD100/t in recent weeks. Trade data for July showed iron ore imports were down 4% m/m to 108.1mt.

Chart of the Day

Chinese refiners signalling increased clean products exports for August, which could alleviate some global supply tightness

5in5 with ANZ Podcast

Summary

The energy sector fell on hopes of a reopening of the Strait of Hormuz. Precious metals gained as weak jobs data eased concerns of rate hikes.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: Singapore

• Central bank speakers: Cleveland Fed President Beth Hammack expected to appear on Yahoo Finance

• Economic data: Colombia CPI; Denmark CPI; Japan BoP current account balance; Norway CPI; Turkey industrial production; Romania rate decision; Ukraine CPI and central bank minutes

• Commodities reports: LME inventory and warrant data (daily, ~9:00am UK / 4:00am NY / 6:00pm AEDT); SHFE warrant change data (after market close); LME commitment of traders positioning data for metals (week ongoing)

• Events: Bank of Japan Summary of Opinions from 30-31 Jul monetary policy meeting; KeyBanc Technology Leadership Forum continues in Park City, Utah

• Market data: None scheduled

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Gold rallied last week as expectations of rate hikes eased following the release of key economic data. The precious metal benefited from the selloff in energy markets earlier in the week, which could ease inflationary pressures and make it less likely the Fed would hike rates. That view strengthened on Friday after an expected contraction in the US jobs market. This takes the pressure off the Fed to tighten. Markets are pricing in only 39bp of hikes this year, down from 49bp earlier in the week. The rally on Friday also came amid a rebound in energy prices following more attacks by Iran on vessels in Hormuz. This suggests the market is less concerned about oil’s impact on inflation and more about the fragile state of the labour market. Investors have turned more bullish in recent weeks. Speculative investors have increased their net long positions to their highest levels in more than six months. In China, gold-backed ETFs racked up more inflows this week, extending the longest streak since March.

Crude oil prices endured another volatile week as tensions remain high in the Middle East. Earlier in the week, prices fell sharply after the US said it would pause attacks on Iran in an effort to conduct talks around the reopening of the Strait of Hormuz. However, some of those losses were reversed later in the week as the reopening would still see significant restrictions on vessels transiting the strait. Oil prices jumped further on Friday after the semi-official Fars news agency reports that Iran had attacked hostile targets in the strait following explosions near Qeshm Island in Hormuz. Abu Dhabi National Oil Co said that three of its tankers were attacked while transiting Hormuz last week. The conflict also appears to be widening, with the Iranian-backed Houthis saying they conducted a large-scale attack against Yemen’s Saudi-aligned government. This follows reports they had struck a Saudi tanker in the Gulf of Aden and threatened shipping in the northern Red Sea. Concerns over broader supply disruptions did ease on Friday. Ukraine agreed to not target some non-Russian oil tankers and Black Sea energy infrastructure critical for exporting Kazakhstan’s crude oil. The Caspian Pipeline Consortium terminal has been under relentless attack in recent weeks and had threatened to disrupt 1.8mb/d that Kazakhstan exports.

European natural gas recorded its second week of losses as talks to reopen the Strait of Hormuz eased concerns of extended supply disruptions. Europe is well behind in refilling its storage facilities before the heating season, with levels sitting at 58% compared with normal seasonal levels of 70%. However, even if the strait reopens, shipping companies will require a sustained period of calm before making the journey through the key waterway. This was highlighted by attacks on Qatar LNG tankers in July despite a peace deal being signed in June. North Asia LNG prices held up better than European prices, as strong demand has forced many consumers to seek more cargoes in the spot market.

Copper gained more than 2% last week as signs of tightness continue to emerge. Inventories in China are falling as smelter output suffers from a tight concentrate market. This has been compounded by a lack of copper scrap. On the London Metal Exchange, the premium of spot prices over the three-month future hit a six-month high of USD154/t, a sign of tightness in the physical market. This comes as metal continues to flow into the US ahead of a possible tariff being placed on imports by the Trump administration.

Chart of the Day

China’s crude oil imports rebounded to 35.7mt in July, up 22% m/m from 29.3mt. However, volumes remained 24.3% lower than a year ago, leaving year-to-date imports down 13.2% y/y to 268mt. The monthly recovery likely reflects higher refinery throughput and vessel arrivals during the temporary reopening of the Strait of Hormuz. But, overall crude demand remains below last year’s level. Depleted inventories could see imports recover further.

5in5 with ANZ Podcast

Summary

Attacks on vessels in the Strait of Hormuz pushed the energy sector higher. Industrial metals were mixed amid a plethora of supply side issues. Precious metals were slightly lower on inflationary concerns.

Prices and commentary accurate as of 07:00 Sydney/05:00 Singapore/17:00(-1d) New York/22:00(-1d) London.

Ahead Today

• Public holidays: None listed

• Central bank speakers: Richmond Fed President Tom Barkin participates in fireside chat hosted by the National Association for Business Economics

• Economic data: Canada: unemployment; China: trade, foreign reserves; China: July trade balance and first batch of trade data, ~11:00 Beijing / ~23:00 NY Thu / ~04:00 UK / ~14:00 AEDT; China: crude oil, natural gas and coal imports; oil products imports and exports; iron ore, copper and steel imports; steel, aluminium and rare earth exports; soybean, edible oil, rubber and meat imports; fertiliser exports; China: foreign reserves for July, including gold; France: unemployment, trade; Germany: industrial production, trade; Japan: household spending, leading index; Mexico: CPI; Philippines: GDP; Taiwan: trade; US: unemployment and nonfarm payrolls, 08:30 NY / 13:30 UK / 23:30 AEDT

• Commodities reports: China weekly iron ore port stockpiles; SHFE weekly commodities inventory, ~15:30 Beijing / ~03:30 NY / ~08:30 UK / ~18:30 AEDT; Shanghai exchange weekly commodities inventory, about 15:30 local time / 03:30 NY / 08:30 UK / 18:30 AEDT; Baker Hughes weekly rig count report, 13:00 NY / 18:00 UK / 04:00 AEDT Sat

• Events: US employment report for July; Sovereign rating updates: Romania, Switzerland, Benin credit ratings review for 7 Aug; Earnings: Eneos; Inpex

• Market data: CFTC weekly commitment of traders data, 15:30 NY / 20:30 UK / 06:30 AEDT Sat; ICE Futures Europe weekly commitment of traders report, 18:30 UK / 13:30 NY / 04:30 AEDT Sat

• Listen to today’s 5in5 with ANZ podcast for more on the global economy and markets.

Market Commentary

Crude oil gained as cracks appeared around the proposal to reopen the Strait of Hormuz. Iranian media reported that the country will seek to bar US and Israeli ships from the key waterway and require compensation from hostile countries before they are allowed to use it. That suggests that most Persian Gulf oil producers that use Hormuz to ship oil to the international market would be restricted. The proposed deal with Oman also required that the US lift its blockade of Iranian ports, which appears unlikely given the US has been steadfast on its demands that no country should be able to control who transits the strait. This raised concerns that unfettered flow remains a mirage. Risks around further disruptions in the near term also raised concerns. Iran’s semi-official Fars news agency reported that the country struck hostile targets in the Strait of Hormuz. The Iranian-backed Houthi militant group said they had conducted a “large-scale” attack on forces from Yemen’s Saudi-backed government, killing and injuring “hundreds” of troops. This is on the back of ongoing threats to shipping in the Red Sea, a key route for Saudi oil since the Middle East conflict began.

Nevertheless, the market was comforted by signs that oil flows are recovering, albeit slowly. Several million barrels a day have continued to move through military-assisted convoys, transponder-disabled voyages and shuttle operations. The UAE has been able to get oil exports nearly back to pre-conflict levels in July. Outside of the Middle East, oil loadings at the Caspian Pipeline Consortium terminal on the Black Sea resumed after being halted by the risk of drone attacks nearby.

European natural gas future surged more than 10% amid concerns of supply disruptions in the Middle East. The reopening of the Strait of Hormuz was expected to allow Qatar to resume shipments of LNG and ease the pressure on European consumers to refill storage facilities. However, the details of the proposed deal suggest Oman will still have challenges to resume shipments. That was heightened following reports of another tanker being attacked near Hormuz. North Asia LNG prices also gained as any optimism about flow through the waterway fizzled out. A drone attack on a floating LNG terminal near Egypt also caused concerns and led Egypt to halt deliveries and seek alternative cargoes on the international market.

The base metals sector was mixed as the market reacted to the latest supply side issues. Aluminium ended the session up as the prospect of vessel flows remaining restricted in the Persian Gulf erased hopes of a resumption of aluminium supply from the region. However, copper traded near its record high, as the threat of US import tariffs continues to pull metal off the international market and into US warehouses. This was exacerbated by a Reuters report that the Democratic Republic of Congo has banned the export of copper concentrates. Nickel fell to its lowest level since mid-July on renewed speculation that Indonesia will grant higher ore production quotas to one of the largest mines.

Gold declined as the renewed rise in oil prices fuelled inflationary concerns. The precious metals have been battered by concerns that higher energy prices will force the Fed to raise rates. Markets are currently pricing-in a single US rate increase by year end, down from two as recently as last week.

Chart of the Day

UAE crude oil exports reached a Middle East conflict high of 5.9mb/d, in late July, according to Bloomberg ship tracking data. The Persian Gulf producer has been making use of small shuttle tankers, that make the risky journey through the Strait of Hormuz to get oil to larger tankers waiting in the Gulf of Oman. Its also been utilising a pipeline that traverses the country to a port that bypasses Hormuz.

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