COMMODITIES-Raw materials recover from China Xmas rate hike

* China rate rise briefly knocks commodities back

* Demand outlook overcomes short-term negativity

* US crude rally resumes, hits 26-mth high

(Updates prices, adds details)

By Nick Trevethan

SINGAPORE, Dec 27 (BestGrowthStock) – Crude oil hit a 26-month
high on Monday and other commodity markets pared early losses
in response to an interest rate rise by the People’s Bank of
China (PBOC), focusing instead on positive fundamentals and
threats to supply.

The PBOC raised interest rates by 25 basis points on Dec.
25, the second rate increase in just over two months. The rise
is part of a series of measures designed to combat inflation,
which is running at a 28-month high of 5.1 percent in
November. [ID:nTOE6BO014]

While markets had expected a rate rise, the timing was a
surprise, but markets recovered from early losses on
expectations the measures would do little to curb China’s
appetite for industrial raw materials, energy, grains and
other agricultural products.

For a factbox on China’s commodity imports, output and
demand: [ID:nL3E6NR029]

“Our economists had expected a rate rise before the end of
the year, but