US stocks extended last week’s losses as elevated bond yields continue to discourage investors from putting money into riskier assets. The 10-year US treasury yield retraced slightly to 4.89% after testing 5.00% - a level not seen since 2007. Investors are getting more and more convinced that the interest rates will remain higher for longer than previously expected as central banks remain determined to keep inflationary pressures at bay. The US economy remains resilient; the annualised GDP growth figure for Q3’23, due this week, is expected to reach 4.5%, which could push bond yields higher. Elsewhere, the ECB is expected to keep the rates unchanged at the next meeting on Thursday. The euro appreciated against the dollar today, reaching 1.06. The dollar declined against other major currencies and stood at 105.84.
China is said to host a key financial policy gathering next week, discussing financial risks, including the property crisis. Speculation in regard to the talk’s outcome could bring some volatility into the market this week. The base metals complex remained broadly unchanged on Monday. Copper is seen retesting the robust support level of $7,878/t, which is the low not seen since May. A break below this level could heighten price volatility, and we might have some short covering. The metal closed at $7,972/t. Likewise, aluminium remained below $2,200/t, closing at $2,176/t. Lead and zinc held steady, settling at $2,102.50/t and $2,420/t, respectively.
Oil futures weakened amid the risk-off sentiment today; WTI and Brent traded at $87/bl and $91/bl at the time of writing. Gold and silver weakened for the first time in 5 days after the most recent rally, holding firm at $1,977/t and $23.15/oz, respectively.
All price data is from 23.10.2023 as of 17:30
