US stocks remained relatively unchanged today following the recent rally that was brought on by the risk-on sentiment. As the market is anticipating the end of the tightening cycle, some Fed speakers this week may cause additional volatility in the market, reaffirming the path that the central bank might take in the last few months of the year. Currently, forward swaps are pricing in almost no chance of a hike in December. The outlook for Q1 2024 is still up for debate, with some speculating around another 25bps. We believe that the slower pace of inflation, especially given the high base of growth seen last year, along with marginal weakness in the labour market, could further discount that hike, keeping the narrative of higher-for-longer rates. However, the volatile components of the CPI, such as food and energy, could be the biggest challenge to this. The dollar remained unchanged, while the 10-year Treasury yield continued to soften.
Most of the base metals complex remained broadly unchanged, apart from zinc, which strengthened for the fourth straight day, settling at $2,610/t, as visible stocks on the LME exchange continued to diminish, falling back to September lows of 74,250mt. Lead gains were less protracted, given some of the restocking that took place; the metal closed at $2,190.50/t. Meanwhile, aluminium and copper remained broadly unchanged at $2,263.50/t and $8,142/t, respectively.
Oil futures continued to decline as global demand was brought into question; WTI and Brent are now back below $77/bl and $80/bl. Gold and silver remained unchanged.
All price data is from 08.11.2023 as of 17:30