Base Metals Comment
US stocks saw minor moves on the day ahead of the busy week filled with macroeconomic releases and major central bank meetings, including the US, Sweden, and England. Most central banks, apart from the Fed, are likely to increase interest rates. Still, most likely, this is going to be near the end of the tightening cycle, with expectations of higher-for-longer priced in at least until the year-end. BOE is likely to deliver another 25bps this week, and inflation should edge higher a day ahead of the announcement. From that point on, it is 50/50 on whether another 25bps will be delivered, with the market pricing in a peak in February. Inflation releases this week are likely to point to rises in headline inflation while the core remains broadly unchanged. This shows that the path to the inflation target will be bumpy, with fluctuations mostly driven by energy price volatility; the winter season is usually the main driver behind energy demand in the Northern Hemisphere. The dollar edged lower, and the 10yr US Treasury remained unchanged.
Lacklustre moves were seen across the base metals complex. Aluminium continued to fluctuate around $2,200/t, and copper dipped below $8,400/t again to close at $8,359.50/t. Lead and zinc remained unchanged, closing at $2,247.50/t and $2,542/t, respectively. We are waiting for activity within the metals market; in the near term, and we could continue to see side-to-side fluctuations. The main risks this week are all coming from macro releases.
Physical tightness continued to drive oil futures higher, with $100/bl now in sight, as WTI and Brent traded at $91/bl and $94/bl. Gold and silver continued to strengthen to $1,928/oz and $23.10/oz, respectively.
All price data is from 18.09.2023 as of 17:30