US stocks softened today, driven, in large, by mega stocks, following softening data coming out of the region. US nonfarm payrolls rose by 187,000 in August; while this level is back to what we have seen in May, the last couple of months were revised significantly lower. The unemployment rate rose to 3.8%, above expectations, highlighting the accelerated pace of the cooling jobs market. At the same time, wage growth has also slowed to the lowest level since February 2022, slowing down the impacts of the wage-price spiral. Still, market expectations of the end of the tightening cycle solidified, and the case for a cut was priced further down the curve. The dollar and the 10yr US Treasury yield both jumped higher, reaffirming the case for higher-for-longer interest rates.
Base metals jumped higher today after another sign from the Chinese government to boost the economy. In particular, the central bank is set to cut the amount of foreign current deposits banks can hold in hopes of propping up the currency, which has been testing the psychological 7.30 level. This came after the news of fresh stimulus for the property market, supporting the gains in construction metals. The upside has, however, cooled later on in the day. Aluminium tested the resistance at $2,250/t before edging back down to $2,237/t. Likewise, copper tested the $8,600/t level, the high not seen since early August, settling at $8,500.50/t. While both lead and zinc jumped higher, the former posted the second consecutive day of gains, testing the January levels of $2,300/t; both metals closed higher at $2,248.50/t and $2,485.50/t, respectively.
Oil futures jumped higher after the fundamental tightness picture gripped the market. Gold and silver remained broadly unchanged.
All price data is from 01.09.2023 as of 17:30