A sell-off intensified across the US markets today, following this week’s pessimism about higher-for-longer rates being in place. The 10yr Treasury yield jumped to 4.68% – the 2007 high, while the dollar softened following recent gains. Meanwhile, personal consumption rose by 0.8% in Q3, making the weakest pace of growth in over a year. GDP rose by 2.1% in the same period, in line with expectations. While consumer spending slowed, it still remains historically resilient; core PCE rose at the slowest pace since 2021, indicating abating pricing pressures felt by consumers. Elsewhere, European inflation figures diverged once more: German CPI fell to the lowest level in 2 years, while Spanish inflation accelerated for the second straight month. This once again underlines the weakness in the bloc’s most industrialised economy.
Base metals complex rebounded today, following marginal weakness seen in the greenback performance. Aluminium surged above $2,250/t, reaching July highs of $2,277.50/t, while copper is now back at $8,217.50/t, offsetting this week’s losses. Zinc rallied, breaking above the robust resistance level of $2,600/t after a sharp rise in orders for zinc in warehouses; the metal closed at $2,620.50/t. This once again highlights that zinc continues to be driven by market fundamental tightness rather than macroeconomics. We expect zinc to trade marginally higher in the coming months.
A rally in oil futures paused today, with WTI and Brent at $92/bl and $96/bl. Gold and silver remained broadly unchanged at $1,863/oz and $22.50/oz, respectively.
All price data is from 28.09.2023 as of 17:30