US stocks strengthened today. Economic data from the world’s largest economy showed a bigger-than-expected increase in monthly consumer spending in September at 0.7%, compared with predicted 0.5%. The surge in consumer spending, which accounts for more than two-thirds of US economic activity, pointed to the persistent resilience of the US economy as a tight market continues to maintain solid wage growth. Robust economic conditions hamper the Fed’s efforts to bring inflation down to the target level of 2%, adding to the narrative of higher interest rates for longer. PCE, the policymakers’ preferred inflation gauge, rose 3.4% YoY in September, primarily reflecting increases in compensation. The dollar fluctuated and stood lower at 106.55 while the 10-year US Treasury yield remained unchanged at 4.86%.
Base metals experienced jumped higher today following a change in sentiment in Chinese asset markets. The government's unexpected mid-year budget adjustment has reinforced the belief that the economy will be supported. As stated in the Quarterly Metals Report, we predict that the negative sentiment in the region is over-exaggerated and will return to a neutral position, in line with market fundamentals. While this may not lead to a price increase, it will help establish support levels in Q4 2023. Currently, both aluminium and copper are being traded at their highest levels of the week; $2,220/t and $8,099/t, respectively. Additionally, nickel maintained its value above the $18,000/t support level and strengthened to $18,374/t. Lead and zinc prices have also risen, closing at $2,123/t and $2,471.50/t, respectively.
Continued escalation of tensions in the Middle East prompted WTI and Brent to edge higher to $84/bl and $88/bl. Gold and silver remained unchanged at $1,982/oz and $22.70/oz, respectively.
All price data is from 30.10.2023 as of 17:30