Global inflation concerns remain, but there are renewed concerns about the prospects for US economic growth for the second half of 2024.

While US GDP growth weakness will weigh on commodity demand overall, future interest rate cuts by Western central banks are likely to offset any negative impact. With the ECB already announcing the loosening of monetary policy in June, and the Federal Reserve set to cut rates by the end of the year, we view the risk to commodity prices as skewed to the upside. Lower interest rates, combined with ongoing fiscal stimulus in mainland China, will support demand and maintain modest upward pressures on commodities in the near term.