US stocks edged lower today as markets await the inflation data, which is expected to show continued softness in headline performance as the core remains sticky. Last week was pivotal in market perceptions, and we expect more focus to be paid to the timing and scale of pricing in the cuts rather than a possibility of another hike in Q4 2023 – the Q1 2024 hike is still up for debate. Elsewhere, the yen is seen trading close to recent lows of 151.50 against the dollar; the currency struggled to break significantly lower on speculation that officials have stepped in to support the yen. Markets will also be looking out for UK data, with CPI and employment figures out this week. We expect the data to solidify expectations of the end of the tightening cycle from the BOE.
Chinese economic indicators continue to soften, showing that post-reopening reopening rebound is fading. However, this did not seem to affect the base metals complex today, as most of the pessimism surrounding economic performance is already priced in. We expect the economy to recover marginally next year, following a zig-zag pattern. Aluminium and copper struggled to break below the robust support level of $2,200/t and $8,000/t, respectively. Nickel also held firm after testing the support of $17,000/t following the recent loss. Zinc unwound affected price moves following the mine closure announcement in Tennessee. However, the psychology remained: the risk regarding the impact of energy prices on zinc closures is growing, with skew flipping to the calls. Zinc settled at $2,553/t.
Oil futures rose today as markets worry that the recent weakness might be overdone, pushing WTI and Brent to $78/bl and $82/bl. Gold and silver fluctuated but remained relatively unchanged on the day, at $1,944/oz and $22.26/oz, respectively.
All price data is from 13.11.2023 as of 17:30
