Markets and Commodities:insights from data and policies

Markets and Commodities: insights from data and policies

UK inflation surprises to the downside, weak IFO and lower-than-expected oil inventories drive gold, silver, copper and crude

Macro updates from yesterday (17 December 2025)

United Kingdom – Inflation and PPI:
UK inflation for November came in below expectations, with CPI at +3.2% year-on-year, signalling a cooling in consumer prices and a decline in core CPI as well. This has strengthened expectations of an interest rate cut by the Bank of England (BoE).

Germany – IFO:
The German IFO index for December fell to 87.6, below forecasts and down from the previous month, reflecting more pessimistic business sentiment and an economy that remains sluggish.

Eurozone – Inflation:
Data point to euro area inflation holding steady at 2.1%, with rates confirmed (slightly revised lower by analysts), while core inflation remains above target, keeping the ECB focused on price dynamics.

EIA – Energy commodities:
According to the EIA report on U.S. weekly inventories as of 12 December, crude oil stocks declined by around 1.27 million barrels, less than expected, signalling a supply market that remains slightly tight.

Macro focus for today (18 December 2025)

Markets face several key drivers today:

• BoE: monetary policy meeting, with expectations of a possible cut in the base rate (widely discussed among economists and traders).
• USA: release of November CPI and U.S. inflation data — crucial for expectations regarding the Fed’s rate path.
• USA – Labour data: update on jobless claims/unemployment, which will further influence the Fed and prospects for rate cuts.

Commodities market – Oil

Oil:
The smaller-than-expected decline in U.S. inventories supported oil prices yesterday, but dynamics remain sensitive to geopolitical factors (e.g. disruptions, sanctions and strategic stockpiling). Despite the drawdown, inventories still point to resilient demand, or at least not a sharp decline.

Outlook: if new U.S. macro data show a slowdown in inflation and signs of labour market deterioration, expectations of Fed cuts in early 2026 will increase — potentially supporting crude prices. Conversely, persistently strong inflation could weigh on oil.

Gold and Silver – Safe havens in focus

Precious metals were among yesterday’s top performers, with silver hitting record highs and gold rising for the seventh consecutive session, amid risk aversion and expectations of more accommodative monetary policies.

Silver: continues its strong momentum, reflecting both industrial demand and safe-haven appeal.
Gold: remains supported by macro uncertainty and prospects of lower global interest rates — as lower borrowing costs reduce the opportunity cost of holding a non-yielding asset.

Copper – Indicator of global growth

The copper market tends to reflect prospects for global industrial growth. Mixed signals from economic sentiment (weak IFO and moderate inflation) suggest limited visibility on cyclical demand. In a context of rising precious metals and energy commodities, copper may benefit from positive inflows only if global growth stabilises in 2026.

Conclusion – Key indicators summary

• Robust but mixed macro signals: falling inflation in the UK and Eurozone, weak German sentiment.
• EIA points to an oil market more balanced than expected.
• Safe-haven assets such as gold and silver gain ground.
• Copper and industrial commodities await confirmation of global growth.
• A crucial day for markets, with U.S. data and the BoE rate decision acting as key catalysts.