US stocks weakened today after labour market data pointed to slight softness in the overall jobs market. US initial jobless claims came in at 207,000 in the week ending September 30th, which is still near the historical lows. This trend is set to continue into Friday’s key non-farm payrolls report, which is projected to have weakened slightly to 170,000 in September, slightly below this year’s average. Despite positive signs in the overall economy, the Treasury yields, and the dollar have reversed the recent upside trend after a sharp rally that these assets have seen in recent days. Both are now trading at 4.74% and 106.50, respectively. Market uncertainty is growing about the impact of high interest rates on economic performance, and while the US economy remains robust, the longer-term toll might be greater than expected. We expect this to weigh on risky assets in the coming months.
Another day of declines was seen across the base metals space, with aluminium and copper falling to $2,232/t and $7,899/t, respectively. Lead struggled below the $2,100/t level and bounced higher to close $2,135.50/t. Zinc, on the other hand, continued to decline, falling below the support level of $2,500/t to settle at $2,476.50/t. Nickel softened below the robust support level of $18,700/t to $18,490/t; the robust support at $18,230/t remains intact.
Oil futures extended the decline to $82/bl and $84/bl for WTI and Brent, respectively, as markets assessed the true impact of tightening global supply on slowing economic growth. Gold and silver, however, continued to weaken to $1,815/oz and $22.70/oz, respectively. We believe these levels to be oversold.
All price data is from 30.10.2023 as of 17:30