Commodities Weekly Rates, FX, and Commodities Strategy

Transcription

1 Rates, FX, and Commodities Strategy PRECIOUS METALS AND CRUDE IN LIKE A LION COMMODITIES UPDATE & WEEK AHEAD DRIVERS 2 ECONOMIC INDICATORS & DATA CALENDAR 4 COMMODITY PRICE FORECASTS 5 MODEL PORTFOLIO TRADE RECOMMENDATIONS 5 TD SECURITIES GLOBAL METALS INDEX 6 WEEKLY PRICE TABLE 7 ETF MONITOR TABLE & CHARTS 8 CHART PACKAGE 1 RESEARCH TEAM 18 Commodity Price Percent Change (29Dec17 to 5Jan18) Coal Platinum 4.5% 4.2% Weekly Commodity Movers & Shakers Platinum outperformed its rival Palladium as investors favored its correlation to gold, while extreme pricing in Pd raised the possibility of substitution. Change in Price (%) Palladium Lead WTI Zinc Gold Silver Brent Uranium S&P GSCI Index 2.7% 2.5% 1.7% 1.3% 1.3% 1.1% 1.1%.4%.3% Crude oil rallied amid fears the unrest in Iran could lead to US sanctions and hamper output. Aluminium retraced after reaching highs not seen since 12, signaling that money managers may have taken profits following the late yearend rally. Natural Gas eased as inventories decreased less than expected, while medium term weather models projected milder temperatures and less demand. Gasoline Heating Oil Nickel Copper Aluminum Henry Hub NG.7%.8% 1.7% 1.8% 3.% 5.4% AECO NG 23.9% Disclaimer: This report is a marketing communication. It has not been prepared in accordance with legal requirements, as outlined in the UK FCA s COBS, designed to promote the independence of investment research and is also not subject to any prohibition of dealing ahead of the dissemination of investment research, although as a matter of policy TD Securities requires its employees not to deal ahead of the dissemination of this report. 1

2 COMMODITIES UPDATE & WEEK AHEAD DRIVERS Strong precious metals and firming crude oil complex in late December and early January drive the S&P GS commodity complex to highs not seen since May 15. Plateauing US drilling activity, higherthanexpected US crude inventory declines and growing Middle East instability prompt traders to grow net long exposure as they covered shorts. Gold and its precious metal peers get boost from a weaker USD, firm industrial demand prospects and the growing belief that the US tax changes will not force aggressive Fed tightening in 18. Industrial metals suffer as China's RMB firms and markets question the wisdom of recent rally at a time the PBoC may be considering tighter policy. The S&P GS commodity complex hit its highest since May 15, as a strong gold, precious metals and crude oil rally offset base metals selling. Platinum was up 4.2 per cent on the week, palladium increased 2.7 percent, with WTI crude posting a 1.7 percent increase and gold recording a nice 1.3 percent gain. Flat Yield Curve Continues to Help Gold There was a broad increase in gold, silver and palladium long positioning, with specs also aggressively covering silver and platinum short exposure. It certainly looks like investors responded positively to a combination of a weaker dollar, decent industrial physical demand prospects amid synchronized global growth and the growing view that the US central bank is unlikely to aggressively tighten monetary policy at a time inflation is materially below target. At the same time, there is a growing consensus that the recently passed US tax legislation will not push the economy toward an accelerated growth trajectory, which would quickly close the output gap and necessitate aggressive monetary tightening. All these factors pushed gold smartly above the $1,3/oz mark, with silver, platinum and palladium also going for the ride higher. Considering that investors seem ready to take hefty long gold positions, even as equity markets are surging, it is quite possible that the yellow metal could attempt to hit $1,357/oz in the not too distant future. A move toward $1,375/oz is also possible should the market believe the US central bank will be gentle in their rate hike signaling. The lack of inflation, weaker US economic data in the coming months or a slumping USD could all be catalysts for more gold upside. Following a modest correction from the peaks reached after the Vienna OPEC meeting, where key global oil producers agreed to limit production by more than expected, crude oil was up once again in the early part of 18. Traders moved prices higher as plateauing drilling activities raised speculation that shale production may not be as robust as expected. At the same time, markets responded positively to higherthanexpected US inventory declines and rising Middle East instability following mass antigovernment protests in Iran. As predicted by the TD Securities Strategy team for a while now, WTI has hit north of $6/bbl recently. Given that crude oil prices are almost at the top of the technical range, without much resistance above $62.58/bbls for WTI ($69.6 for Brent), any significant fundamental improvement could easily send WTI crude toward $7/bbl ($8 for Brent). An additional round of instability in Iran, Saudi Arabia, or a serious US production disappointment Specs Go Long On Geopolitics and Large Inventory Draws Source: Bloomberg Source: Bloomberg 2

3 59 Crude Inventories Approach FiveYear Average Few Technical Impediments for a Move Near $7/$8 if Fundamentals Improve Further Nov3 Dec1 Dec29 Jan19 MMbbl Mar16 May11 Jun8 Jul6 Aug3 Aug31 Sep28 Oct26 Nov23 Dec21 Source: DOE, TD Securities Prior 5yr Range 5yr Avg could well be possible catalysts. It should be remembered that US producers are still in a precarious financial position, with most not covering all their costs, CAPEX is low and the backwardated futures curve makes it hard to secure financing as these prices are still far below $6/bbls. At the same time, costs are rising as higher drilling rig utilization rates are forcing producers to develop more expensive green field assets. With a 1.6 percent w/w decline, base metals recorded their worst weekly performance since earlydecember 18, as aluminium plunged 3. percent, copper dropped 1.8 percent and nickel fell 1.7 percent. The base metals complex suffered as some traders likely took profits while others believed the recent rally was too robust considering a stronger RMB, concerns that demand may weaken as China switches to a new and less metal intensive economy and as PBoC policy tightens. Source: Bloomberg Bart Melek 3

4 ECONOMIC INDICATORS & DATA CALENDAR A weak US dollar and flat yield curve have seen prices rally and gold liquidations come to an end in 18. After breaking above the $1,3/oz mark, traders have been keeping an eye on the 17 high of $1,357/oz and will be looking to the latest round of economic data to gauge inflation and Fed expectations before taking the yellow metal to those levels again. The data precious metals traders will be watching this week will be the CPI, PPI and retail sales in the US, along with the release of the ECB minutes. With no rate hike expected until March, these data releases in the leadup will be important, as a noticeable improvement in the inflation outlook would likely be needed to justify pulling the trigger again. A failure to see any real pickup in the data could well be the needed catalyst to test the 17 highs. Meanwhile, base metal traders will pay particular attention to the Chinese monthly trade data, along with the aggregate financing print. Considering that China's commodity appetite has remained buoyant of late, which has eased concerns that the deleveraging effort may impact growth prospects for raw material demand, this month's trade and financing data will provide valuable insights into demand growth from the world's top consumer. In energy markets, traders will focus on the weekly inventory report, and specifically data on refinery runs, inventories and production. Refinery demand remained at extremely high levels recently, leading to heavy crude draws and product builds, but refineries typically enter into maintenance during January, which could see builds in crude inventories. The market will be watching whether we will follow this seasonal trend, or if strong demand and OPEC cuts continue to see inventories drain, supporting this higher price environment. In addition to the weekly inventory and rigs reports, the DOE will be releasing their short term outlook, while President Trump is set to make a decision on signing a series of waivers, renewed every 1 days, in relation to the Iran nuclear deal. Trump's decision will also be on the radars amid current protests against the Iranian government.. Ryan McKay, Daniel Ghali Release Consensus Prior TUESDAY (January 9) 5: EUR Unemployment Rate (Nov) 8.7% 8.8% 6: USD NFIB Small Business Optimism (Dec) : USD JOLTS Job Openings (Nov) : USD DOE ShortTerm Crude Outlook (Jan) : USD DOE ShortTerm Mogas Outlook (Jan) : USD DOE ShortTerm Diesel Outlook (Jan) : USD DOE ShortTerm Ht Oil Outlook (Jan) : USD DOE ShortTerm NatGas Outlook (Jan) 1.92 :3 CNY PPI y/y (Dec) 4.8% 5.8% :3 CNY CPI y/y (Dec) 1.9% 1.7% 1/9 1/15 CNY Money Supply M1 y/y (Dec) 12.6% 12.7% 1/9 1/15 CNY Money Supply M2 y/y (Dec) 9.2% 9.1% 1/9 1/15 CNY Aggregate Financing CNY (Dec) 15.bn 16.bn 1/9 1/15 CNY New Yuan Loans CNY (Dec) 1.bn 11.bn 1/9 1/15 CNY Money Supply M y/y (Dec) 5.9% 5.7% WEDNESDAY 7: USD MBA Mortgage Applications (Jan).7% 8:3 USD Import Price Index m/m (Dec).4%.7% 8:3 USD Import Price Index ex Petroleum m/m (Dec).1%.1% 8:3 USD Import Price Index y/y (Dec) 3.1% 3.1% 8:3 USD Export Price Index m/m (Dec).3%.5% 8:3 USD Export Price Index y/y (Dec) 3.1% 1: USD Wholesale Inventories m/m (Nov F).7%.7% 1: USD Wholesale Trade Sales m/m (Nov).7% 1:3 USD DOE U.S. Gasoline Inventories (Jan) 35k 4813k 1:3 USD DOE U.S. Crude Oil Inventories (Jan) 4k 7419k 1:3 USD DOE Cushing OK Crude Inventory (Jan) 2441k 1:3 USD DOE U.S. Distillate Inventory (Jan) 3k 8899k 1:3 USD DOE U.S. Refinery Utilization (Jan).5% 1.% 1:3 USD DOE Crude Oil Implied Demand (Jan) :3 USD DOE Gasoline Implied Demand (Jan) :3 USD DOE Distillate Implied Demand (Jan) THURSDAY 5: EUR Industrial Production SA m/m (Nov).7%.2% 5: EUR Industrial Production WDA y/y (Nov) 3.% 3.7% 7:3 EUR ECB Publishes Account of December Monetary Policy M 8:3 USD PPI Final Demand m/m (Dec).2%.4% 8:3 USD PPI Ex Food and Energy m/m (Dec).2%.3% 8:3 USD PPI Ex Food, Energy, Trade m/m (Dec).2%.4% 8:3 USD PPI Final Demand y/y (Dec) 3.% 3.1% 8:3 USD PPI Ex Food and Energy y/y (Dec) 2.5% 2.4% 8:3 USD PPI Ex Food, Energy, Trade y/y (Dec) 2.4% 8:3 USD Initial Jobless Claims (Jan) 245k 25k 8:3 USD Continuing Claims (Dec) 19k 1914k 8:3 USD Revisions: Philadelphia Fed Manufacturing Index (Jan) 8:45 USD Bloomberg Jan. United States Economic Survey (Jan) 9:45 USD Bloomberg Consumer Comfort (Jan) :3 USD EIA Working Natural Gas Implied Flow (Jan) :3 USD EIA Natural Gas Storage Change (Jan) : USD Monthly Budget Statement (Dec) $3.bn $138.5bn 1/12 CNY Crude Oil Imports Volume Tons (Dec) 37.4m 1/12 CNY Refined Petroleum Oil Exports Volume Tons (Dec) 5.79m 1/12 CNY Coal/Lignite Imports Volume Tons (Dec) 22.5m 1/12 CNY Refined Petroleum Oil Imports Volume Tons (Dec) 2.54m 1/12 CNY Fuel Oil Imports Volume Tons (Dec) 1.7m 1/12 CNY Trade Balance (Dec) $37.22bn $4.21bn 1/12 CNY Exports y/y (Dec) 1.6% 12.3% 1/12 CNY Imports y/y (Dec) 15.1% 17.7% 1/12 CNY Trade Balance CNY (Dec) 26.3bn 263.6bn 1/12 CNY Exports YoY CNY (Dec) 7.1% 1.3% 1/12 CNY Imports YoY CNY (Dec) 11.6% 15.6% FRIDAY 8:3 USD CPI m/m (Dec).1%.4% 8:3 USD CPI Ex Food and Energy m/m (Dec).2%.1% 8:3 USD CPI y/y (Dec) 2.1% 2.2% 8:3 USD CPI Ex Food and Energy y/y (Dec) 1.7% 1.7% 8:3 USD CPI Index NSA (Dec) :3 USD CPI Core Index SA (Dec) :3 USD Retail Sales Advance m/m (Dec).5%.8% 8:3 USD Retail Sales Ex Auto m/m (Dec).3% 1.% 8:3 USD Retail Sales Ex Auto and Gas (Dec).5%.8% 8:3 USD Retail Sales Control Group (Dec).4%.8% 8:3 USD Real Avg Weekly Earnings y/y (Dec).8% 8:3 USD Real Avg Hourly Earning y/y (Dec).2% SATURDAY SUNDAY MONDAY (January 15) 2:3 EUR Bloomberg Jan. Eurozone Economic Survey (Jan) 5: EUR Trade Balance SA (Nov) 19.bn 5: EUR Trade Balance NSA (Nov) 18.9bn Source: Bloomberg *Eastern Standard Time 4

5 COMMODITY PRICE FORECASTS: Commodity Spot (Avg of forward month contracts) Price Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 18F 19F Precious Metals Gold 1 $/oz 1,3 1,3 1,3 1,325 1,325 1,325 1,325 1,375 1,375 1,313 1,35 Silver 1 $/oz Platinum 1 $/oz 966 1, 1,5 1,75 1,1 1,15 1,15 1, 1, 1,56 1,175 Palladium 1 $/oz 1,95 1, 1, 1,25 1,5 1,1 1,1 1,15 1,15 1,19 1,125 Base Metals #N/A Copper 2 $/lb $/tonne 7,8 6,675 6,675 6,85 6,85 6,875 6,875 6,95 6,95 6,763 6,913 Zinc 2 $/lb $/tonne 3,45 3,475 3,475 3,25 3,25 3,37 3,37 3,527 3,527 3,362 3,417 Lead 2 $/lb $/tonne 2,612 2,646 2,646 2,469 2,469 2,61 2,61 2,513 2,513 2,557 2,557 Nickel 2 $/lb $/tonne 12,487 11,23 11,23 11,244 11,244 11,23 11,23 11,244 11,244 11,133 11,133 Aluminium 2 $/lb $/tonne 2,159 2,5 2,5 2,116 2,116 2,116 2,72 2,72 2,116 2,83 2,94 Ene rgy #N/A WTI Crude Oil $/bbl Brent Crude Oil $/bbl Heating Oil (ULSD) $/gal Gasoline $/gal NYMEX Natural Gas $/MMBtu AECO Natural Gas $/MMBtu CAD/GJ Uranium $/lb New castle Thermal 5 $/tonne Notes: F = Forecast, E = Estimate, A = Actual; 1. London PM Fix; 2. LME; 3. Molybdenum equivalent to moly oxide, FOB USA; 4. CFR China, 62% Fe, dry; 5. Japan CIF steam coal markernewcastle MODEL PORTFOLIO TRADE RECOMMENDATIONS ONGOING MODEL TRADES Trade Entry Date Entry Stop Current Target P/L Long Silver 4 14/Nov/ % Reenter Short Nickel 3 9/Nov/17 12, ,3. 12,535. 1, % Long Pt/Pd Ratio 2 1/Oct/ % Short Brent/WTI Spread 1 11/Sep/ $.38/bbl CLOSED MODEL TRADES Trade Entry Date Entry Exit Exit Date Target P/L Short Aluminium /Sep/17 2,188. 2,14. 7/Dec/17 1,96. 8.% Long Oil (Brent) 15/Nov/ /Nov/ % Short Nickel /Oct/17 12,5. 12,9. 6/Nov/17 1, % Short Lead 2/Oct/17 2, ,43. 31/Oct/17 2, % Short Gold/Silver ratio 27/Jul/ /Sep/ % Long Platinum 12/May/ /Aug/17 1, % Short Aluminium 11/Aug/17 2,46. 2,136. 1/Sep/17 1, % Short Aluminum 17/Feb/17 1,9. 1,98. 8/Aug/17 1, % Notes: Spread trades P&L calculated on absolute basis; 1. Trade from September 11, 17 Commodities Weekly; 2. Trade from October 1, 17 Chart Logic; 3. Trade from October, 17 Chart Logic; 4. Trade from the 18 Global Outlook 5

6 TD SECURITIES GLOBAL METALS PRICE INDEX The TD Securities Global Metals Price Index (TDGMPI) is an aggregate, weighted price measure based on a basket of spot base and precious metals. TDGMPI weights are based on the metals importance in the global economy, with USD dollar value used as a proxy. The TDGMPI encompasses nine metals. The weights are based on a rolling 5 year average contribution of each metal to the total value of global metal production. The nine metals and their current weights are: copper (26.3%), aluminum (16.6%), nickel (5.5%), zinc (4.6%), lead (4.%), gold (35.6%), silver (4.6%), platinum (2.1%) and palladium (.8%). Thus, metals which have a greater impact on the value of world metal production receive a greater weighting in the index. This index can be used as an analytical tool, mainly to track how the metals sector is performing over time, but also to compare performance of each of the individual metals and subsectors (precious metals, base metals) to the index as a whole. $bn TD Global Metals Price Index TD Base Metals Price Index TD Precious Metals Price Index $bn TD Global Metals Price Index (lhs) TD Base Metals Price Index (rhs) TD Precious Metals Price Index (rhs) Source: TD Securities 6

7 WEEKLY PRICE TABLE Commodity Markets Weekly Update Commodity 9Jan a week ago a month ago a year ago year to date TD Global Metals Price Indices TD Global Metals Price Index ($bn) #N/A #N/A TD Global Precious Metals Price Index ($bn) #N/A #N/A TD Global Base Metals Price Index ($bn) #N/A #N/A Precious Metals Gold Spot (US$/oz.) Silver Spot (US$/oz.) Platinum Spot (US$/oz.) Palladium Spot (US$/oz.) Base Metals & Minerals Aluminum (US$/tonne) Copper (US$/tonne) Zinc (US$/tonne) Nickel (US$/tonne) Lead (US$/tonne) Tin (US$/lb) UxC Uranium U38 Swap (US$/lb) Bulks Thermal Coal Baltic Dry Index Energy WTI Crude Oil (US$/bbl.) Brent Crude Oil (US$/bbl.) Heating Oil (US$/gal.) Gasoline, RBOB (US$/gal.) NYMEX Natural Gas (US$/mmbtu) AECO Natural Gas (US$/mmbtu) Denatured Ethanol (US$/gal.) Softs USDA No. 1 Hard Red Winter Wheat (US$/bush USDA No. 2 Yellow Corn (US$/bush) USDA No. 1 Yellow Soybeans (US$/bush) Coffee (US$/lb) Cotton (US$/lb) Lean Hogs (US$/lb) Cattle, Feeder (US$/lb) Cattle, Live (US$/lb) Equities S&P S&P TSX Composite S&P TSX Global Gold S&P TSX Global Mining S&P TSX Energy Index XAU Philly Gold & Silver Index FTSE Nikkei Currencies CAD/USD Euro/USD Japanese Yen British Pound Yuan US Trade Weighted Dollar (1973=1)

8 ETF MONITOR TABLE TD Securities: Commodities Trade Strategy Precious Metals ETF Monitor Latest Holdings 5Day Change 3Day Change YearAgo Change Last Updated Date Ounces Value ($US Millions) Ounces Value ($US Millions) Ounces Value ($US Millions) Ounces Value ($US Millions) Total GOLD ETFs 61,361,296 8,944 (12,565) 986 (474,949) 3,742 2,973,278 11,982 SPDR Gold Trust 1/5/18 26,841,574 35,48 (84,766) 328 (341,86) 1, ,824 4,513 ETF Securities 12/29/17 9,612,4 12, (74,815) ,74 1,716 ishares 1/5/18 7,915,228 1,441 86, , ,539,664 2,911 ZKB 4/21/17 4,718,695 6,225 (15,963) 56 (15,963) , Source 12/29/17 3,622,732 4, (131,741) , Sprott Physical 1/5/18 1,713,72 2,261 (19,46) 3 (19,4) 97 (66,75) 158 Central Fund of CA 12/29/17 1,664,144 2,195 1, 28 1, 119 (8,5) 2 Xetra Gold 8/26/17 1,575,65 2, Julius Baer 12/7/17 1,451,779 1,915 16,5 45 6,9 111 (47,3) 145 NewGold 12/29/17 979,689 1,292 (86) 16 (33,534) 27 (98,222) 19 Central Gold Trust 1/19/16 71, (841) 1 (841) 48 (3,317) 93 Royal Canadian Mint 8/26/17 3, (68) 41 Goldist 8/26/17 51, Total SILVER ETFs 64,826,852 1,964 (1,846,688) , (8,7,86) 215 ishares 1/5/18 318,424, 5,448 (2,5,7) 17 (5,931,5) 33 (22,776,) (4) Central Fund of CA 8/26/17 75,644,12 1, ETF Securities 12/29/17 88,951,344 1,522 (33,756) 15 6,57, ,429,714 5 ZKB 4/21/17 72,846,568 1, , , ,947,55 88 Sprott Physical 1/5/18 56,351, ,99 42 Julius Baer 12/7/17 13,663, , 5 38, , 22 Claymore 8/26/17 3,373, Silver Bullion Trust 8/26/17 2,978, Royal Canadian Mint 8/26/17 2,73, 47 3 (7,77) 1 Total PLATINUM ETFs 2,281,995 2,219 (4,432) 96 (8,2) ,2 58 ETF Securities 12/29/17 1,32,155 1,4 (2,162) 43 11, , NewPlat 1/5/18 783, (6) 34 (22,8) 46 1,43 (3) ZKB 4/21/17 271, (2,884) 9 (2,884) 5,89 4 Swiss & Global 12/7/17 9, (3) 7 9,64 9 Source 12/29/17 11, ,673 3 (65,323) (64) Sprott Physical 8/26/17 37, (4,422) (5) Deutsche Bank 1/5/18 32, (36) 1 2,88 5 (3,83) (4) Total PALLADIUM ETFs 1,46,643 1,68 (21,851) 32 (31,891) 13 (63,593) 24 ETF Securities 12/29/17 411, (2,286) 13 (1,951) 27 (211,349) (19) Standard Bank 4//17 424, , (178,982) 1 NewPall 5/19/17 217, (7,924) () (7,974) 12 (54,48) (7) ZKB 4/21/17 192,2 211 (12,21) (6) (12,21) 6 (27,627) (12) Source 12/29/17 5,44 6 (11) (125,566) Swiss & Global 12/7/17 82, (2,81) 5 (24,6) 1 Sprott Physical 8/26/17 85, (1,785) 1 Deutsche Bank 1/5/18 9, (1) (1) 1 (1,526) Note: Totals include more than the listed ETFs, hence do not alw ays add up, and the data updates at different, respective ETF issuer 8

9 ETF CHARTS Gold ETF Holdings Silver ETF Holdings 85 8 Total ETF Holdings (LHS) Spot Gold Price (RHS) 1,9 1,8 8 Total ETF Holdings (LHS) Spot Silver Price (RHS) , Million Ounces ,6 1,5 1,4 1,3 1, 1,1 $UZ/Oz Million Ounces $UZ/Oz , Respectiv e ETF Issuer 1, , Respectiv e ETF Issuer 1 Platinum ETF Holdings Palladium ETF Holdings 3,5 2, 4, 1,1 3, 1,8 3,5 1, Thousands Ounces 2,5 2, 1,6 1,4 1, $UZ/Oz Thousands Ounces 3, 2, $UZ/Oz 1,5 Total ETF Holdings (LHS ) Spot Platinum Price (RHS) 1, , Respective ETF Issuer 1, 8 2, Total ETF Holdings (LHS ) Spot Palladium Price (RHS) 1, , Respectiv e ETF Issuer 5 4 9

10 CHART PACKAGE FORWARD CURVES $US/Troy Oz 1,495 1,445 1,395 1,345 1,295 1,245 1,195 1,145 1,95 1,45 COMEX Gold $US/Troy Oz COMEX Silver $US/lb LME Copper $US/lb LME Aluminum $US/lb LME Nickel $US/lb LME Zinc

11 CHART PACKAGE FORWARD CURVES (CONTINUED) NYMEX WTI Crude Oil ICE Brent Crude Oil $US/bbl 58 $US/bbl (rhs) NYMEX 2:1:1 Crack Spread NYMEX Natural Gas $US/bbl $US/MMBtu NYMEX Coal 28 NYMEX Uranium $US/Ton $US/Ton

12 CHART PACKAGE VOLATILITY CURVES COMEX Gold COMEX Silver ATM Implied Vol (%) ATM Implied Vol (%) NYMEX Platinum NYMEX Palladium 22 ATM Implied Vol (%) ATM Implied Vol (%)

13 CHART PACKAGE INDUSTRIAL METAL INVENTORIES Days Supply Aluminum Warehouse Inventories Inventory at LME + SHFE (lhs) Aluminum Price (rhs) $US/lb Days Supply Copper Warehouse Inventories Inventory at LME, SHFE, COMEX (lhs) Copper Price (rhs) $US/lb Lead Warehouse Inventories Inventory at LME + SHFE (lhs) Lead Price (rhs) Nickel Warehouse Inventories Inventory at LME (lhs) Nickel Price (rhs) Days Supply $US/lb Days Supply $US/lb Days Supply Zinc Warehouse Inventories Inventory at LME + SHFE (lhs) Zinc Price (rhs) $US/lb

14 CHART PACKAGE PETROLEUM & NATURAL GAS INVENTORIES 59 U.S. Crude Oil Inventory Gasoline Inventory MMbbl MMbbl Nov3 Dec1 Dec29 Jan19 Mar16 May11 Jun8 Jul6 Aug3 Aug31 Sep28 Oct26 Nov23 Dec21 Nov3 Dec1 Dec29 Jan19 Mar16 May11 Jun8 Jul6 Aug3 Aug31 Sep28 Oct26 Nov23 Dec21 Prior 5yr Range 5yr Avg Source: DOE, TD Securities Prior 5yr Range 5yr Avg Source: DOE, TD Securities 75 Crude Oil Inventory at Cushing, OK 18 Heating Oil (ULSD) Inventory MMbbl Nov3 Dec1 Dec29 Jan19 Mar16 May11 Jun8 Jul6 Aug3 Aug31 Sep28 Oct26 Nov23 Dec21 MMbbl Nov3 Dec1 Dec29 Jan19 Mar16 May11 Jun8 Jul6 Aug3 Aug31 Sep28 Oct26 Nov23 Dec21 5yr Range 5yr Avg Source: DOE, TD Securities Prior 5yr Range 5yr Avg Source: DOE, TD Securities Operating Capacity Utilization (%) Refinery Utilization 1.% 95.% 9.% 85.% 8.% 75.% Nov3 Dec1 Dec29 Jan19 Mar16 May11 Jun8 Jul6 Aug3 Aug31 Sep28 Oct26 Nov23 Dec21 5yr Range 5yr Avg Source: DOE, TD Securities Storage (Bcf) US Natural Gas Storage Level 4,5 4, 3,5 3, 3,126 Bcf 2,5 2, 1,5 1, 5 3/Dec 27/Jan 24/Feb 24/Mar 21/Apr 19/May 16/Jun 14/Jul 11/Aug 8/Sep 6/Oct 3/Nov 1/Dec 29/Dec Source: EIA, TD Securities 5yr Range 5yr Avg

15 Rates, FX, and Commodities Strategy CHART PACKAGE COMMITMENTS OF TRADERS 4, COMEX Gold $UD/oz 1,7 1, COMEX Silver $UD/oz 35 35, 3, 25,, 1,6 1,5 1,4 1,3 1, 8, 6, , 1, 5, 1, 1,1 1, 4,, 15 Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 9 Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 1 Gold Net Spec Position (lhs) Gold Price (rhs) Silver Net Spec Position (lhs) Silver Price (rhs) 6, 5, 4, 3,, 1, 8, 6, 4,, (,) (4,) (6,) NYMEX Platinum Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Platinum Net Spec Position (lhs) COMEX Copper Platinum Price (rhs) $UD/oz 1,8 1,7 1,6 1,5 1,4 1,3 1, 1,1 1, 9 8 Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Copper Net Spec Position (lhs) Copper Price (rhs) $UD/lb , 3, 25,, 15, 1, 5, 6, 5, 4, 3,, 1, (1,) (,) NYMEX Palladium Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Palladium Net Spec Position (lhs) NYMEX & ICE Natural Gas $UD/oz Palladium Price (rhs) 1, Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Natural Gas Net Spec Position (lhs) $UD/MMbtu Natural Gas Price (rhs)

16 Rates, FX, and Commodities Strategy CHART PACKAGE COMMITMENTS OF TRADERS 8, 7, 6, 5, 4, 3,, 1, NYMEX & ICE WTI Crude Oil Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 WTI Net Spec Position (lhs) WTI Price (rhs) $UD/bbl , 35, 25, 15, 5, (5,) (15,) (25,) NYMEX & ICE Brent Crude Oil Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Brent Net Spec Position (lhs) Brent Price (rhs) $UD/bbl , NYMEX Gasoline $UD/gal 35 8, NYMEX Heating Oil $UD/gal 1, 3 6, 29 8, 6, 4,, ,, (,) (4,) (6,) 9 Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Jul13 Oct13 Apr14 Jul14 Oct14 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Gasoline Net Spec Position (lhs) Gasoline Price (rhs) Heating Oil Net Spec Position (lhs) Heating Oil Price (rhs) Net Contracts LME Copper $UD/MT Net Contracts LME Aluminum $UD/MT Aug14 Nov14 Feb15 May15 Aug15 Nov15 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 Aug14 Nov14 Feb15 May15 Aug15 Nov15 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 Copper Net Spec Position (lhs) Copper Price (rhs) Al Net Spec Position (lhs) Aluminium Price (rhs) 16

17 CHART PACKAGE COMMITMENTS OF TRADERS Net Contracts LME Nickel $UD/MT Net Contracts LME Zinc $UD/MT Aug14 Nov14 Feb15 May15 Aug15 Nov15 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 Nickel Net Spec Position (lhs) Nickel Price (rhs ) Net Contracts LME Lead $UD/MT Aug14 Nov14 Feb15 May15 Aug15 Nov15 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 Aug14 Nov14 Feb15 May15 Aug15 Nov15 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 Zinc Net Spec Position (lhs) Zinc Price (rhs) Lead Net Spec Position (lhs) Lead Price (rhs ) COMMODITIES RESEARCH TEAM: Bart Melek Global Head of Commodity Strategy bart.melek@tdsecurities.com Ryan McKay Commodity Strategist ryan.mckay@tdsecurities.com Daniel Ghali, CFA Commodity Strategist daniel.ghali@tdsecurities.com

18 GLOBAL STRATEGY TEAM Global Strategy Richard Kelly Head of Global Strategy Commodities Strategy Bart Melek Head of Commodity Strategy Ryan McKay Commodity Strategist Daniel Ghali Commodity Strategist Global Macro Strategy Michael Hanson Head of Global Macro Strategy Annette Beacher Chief AsiaPacific Macro Strategist Fred Demers Chief Canada Macro Strategist Jacqui Douglas Chief European Macro Strategist James Rossiter Senior Global Strategist Brittany Baumann Macro Strategist Robert Both Macro Strategist Global Rates Strategy Priya Misra Head of Global Rates Strategy Gennadiy Goldberg Senior US Rates Strategist Cheng Chen US Rates Strategist Andrew Kelvin Senior Canada Rates Strategist Prashant Newnaha Senior Asia Pacific Rates Strategist Pooja Kumra Rates Strategist Global Strategy USA Canada Australia New Zealand UK Europe Emerging Markets FX & Commodities FX Strategy Ned Rumpeltin European Head of FX Strategy Mark McCormick North American Head of FX Strategy Mazen Issa Senior FX Strategist Emerging Markets Strategy Cristian Maggio Head of Emerging Markets Strategy Paul Fage Senior Emerging Markets Strategist Sacha Tihanyi Senior Emerging Markets Strategist Research Home Page: Bloomberg Page: TDGR<GO> 18

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