US stocks opened higher but struggled to maintain momentum, resulting in a largely unchanged day. Treasury yields fell after yesterday's gains, indicating that recent highs are not sustainable; the 10-year yield is now trading at 4.63%. The conflict in Israel remains in the spotlight for the markets, keeping energy assets and safe havens elevated this week. Meanwhile, US consumer expectations for the year ahead rose sharply in October to 3.8%, leading to a sharp deterioration of sentiment and optimism regarding consumer finances. The dollar remained strong, trading above 106.50.
Global sentiment weighed on the base metals complex, causing prices to edge lower across the board. Economic data from China also suppressed investor appetite, with inflation readings coming in line with our expectations of 0.0%. Meanwhile, the nation's trade activity continued to moderate. While this is not a sign of an economic rebound, it is a welcome relief for China's outlook coming into Q4 2023. We expect the sentiment to reverse from oversold to neutral in the coming months, in line with current fundamentals. Aluminium retested the support at $2,200/t once again, while copper remained unchanged, slightly below $8,000/t. Lead continued to decline, marking the fifth consecutive day of losses to close at $2,042/t as LME stocks continued to climb, reaching summer 2021 highs. Zinc also edged lower to $2,446/t.
Oil futures remained elevated as investors priced in the conflict in Israel. Gold and silver rallied back into the longer-term ranges, trading at $1,921/oz and $22.70/oz, respectively.
All price data is from 13.10.2023 as of 17:30
