US stocks rebounded today as the markets await big tech results due this evening. S&P Global US Manufacturing PMI data came above expectations at 50.0. The preliminary results show that the world’s largest economy managed to bounce back in October after recording a narrow contraction last month. Higher-than-expected performance in both manufacturing and services led to the composite reading to 51.0. Conversely, data from the Eurozone pointed to a significant slump in manufacturing and services, with HCOB Eurozone Composite PMI below expectations at 46.5. The divergence in performance led the euro to depreciate against the dollar, with the USDEUR pair at 0.942. The dollar index increased to 106.09 while the 10-year US Treasury yield came back to 4.86% after rejecting prices above the 5.00% level.
Chinese government stepped up support for the economy, issuing additional sovereign debt and raising the budget deficit ratio. We expect that while these announcements are not game changers for the market, the cumulative impact of policy support, especially in the form of housing market aid, will help stabilise the demand for steel in Q4 2023 before a slight recovery next year. As a result, this announcement helped to support iron ore price performance as a gauge of the nation’s sentiment. The base metals, however, prices continued to remain range-bound. Aluminium held above the $2,165/t level once again, and copper is now back above $8,000/t. Nickel continued to edge lower but struggled to break the support of $18,000/t just yet, closing slightly above it at $18,274/t. Lead and zinc edged higher to settle at $2,109.50/t and $2,442.50/t, respectively. Most of the cash to 3-month spreads, except for lead, remain in contango.
Oil futures weakened as geopolitical tensions in the Middle East softened slightly, pushing WTI and Brent lower to $83/bl and $87/bl. Likewise, gold and silver lost some momentum into $1,965/oz and $22.88/oz, respectively.
All price data is from 24.10.2023 as of 17:30