1. Metals Outlook
  2. Daily Base Metals Report

US stocks extended their losses from yesterday as investors anticipated high interest rates for a longer period, which pushed bond yields up. The US job openings data released for August further reinforced this expectation, with the level surging to 9.61 million, driven mainly by white-collar postings, which indicated a tightening labour market. The 10-year US Treasury yield continued to break new highs, reaching 4.73%, while the dollar remained flat and hovered around 107. Tomorrow's final S&P Global PMI Composite data will reveal the state of the private sector in major economies. Currently, the US data is expected to indicate an expansion in September, which is in contrast to the UK and the Eurozone, which have likely experienced further contraction in the previous month. The US economy's continued strength in the face of a tight monetary environment is likely to keep the dollar elevated compared to other major currencies.

Although the macroeconomic factors continued to weigh on the base metals complex, we anticipate today's weakness to be mainly driven by the reversal of earlier gains. Specifically, aluminium offset Friday's rally, falling back to $2,2890/t. Similarly, zinc returned to last week's level of $2,510/t, in line with the recent average. Copper tested the $8,000/t level but struggled below it, indicating continued downward pressure. Nickel, on the other hand, remained above the $18,600/t level once more, suggesting that the recent downside pressures are stalling.

Oil futures remained flat, while gold and silver held steady despite the continued gains in the US Treasury yields. This implies that the recent sell-off may be losing momentum, with both metals now trading at $1,820/oz and $21.15/oz, respectively.

All price data is from 03.10.2023 as of 17:30


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