US stocks softened today as Republicans headed for control of the House with a much smaller-than-expected margin as the race for the Senate still remains open. The markets are bracing for the inflation figure tomorrow, which is expected to cool slightly from the 8.2% we saw in September but still remain elevated given the historical level and the Fed targets. The dollar gained a footing back above 110, and the 10yr US Treasury yield softened once again. Elsewhere, Chinese construction shares jumped higher today after the regulators expanded the financing support for the sector.
This news, however, failed to prop up the metals market, and we saw a lacklustre performance across the complex. Zinc and aluminium led the declines, as Chinese producer prices fell into deflation for the first time in two years. The PPI fell by 1.3% in October as lockdown restrictions and a weaker property sector forced the companies to cut prices. This is a stark difference from other manufacturing economies that see producer prices post double digits on their PPI prints. Both metals settled lower at $2,853.50/t and $2,319/t, respectively. Copper fluctuated between gains and losses but still struggled to break above yesterday’s close, settling at $8,104.50/t. Nickel strengthened for the fourth straight day, as the metal continues to edge closer to a robust resistance of $25,000/t that it struggled to break in mid-September; the metals settled at $24,688/t. Lead also closed higher at $2,077/t.
Oil futures weakened on higher crude stockpiles and weaker China’s economic prospects; WTI and Brent softened into $86/bl and $93/bl. Gold and silver wavered as both metals remained unchanged day-on-day at $1,711/oz and $21.28/oz, respectively.
All price data is from 09.11.2022 as of 17:30