European stocks increased slightly as bond prices decreased following the announcement that Germany will suspend debt limits for the fourth year in a row. This news is raising concerns about the country's ability to spend without excessively inflating its debt. As a result, Germany's 10-year yield rose by 6.6 basis points. US stock markets were closed for Thanksgiving. In November, both global manufacturing and service PMIs improved month-on-month but remained in contractionary territory for the sixth consecutive month. The indices suggest that the global economic performance is starting to bottom out, and although some economies may not be able to avoid a contraction, the outlook for a recession has diminished. In addition, markets now expect China to hold off on implementing additional monetary policy easing until next year, although other fiscal measures are still available to support the economy if necessary.
The base metals complex saw a mixed day of trading today. Aluminium and copper remained unchanged from yesterday's prices, closing at $2,224.50/t and $8,409.5/t, respectively. Lead continued to give up some of its recent gains, but there is a lack of impetus below the $2,200/t level, causing the metal to settle at $2,214/t. Nickel struggled below $16,500/t today, and we expect the longer-term trend on the downside to continue to drift lower marginally due to the global Class 2 oversupply weighing on nickel prospects into the year-end. Zinc bounced back to close at $2,537.50/t. Iron ore futures fell from a high of $135/mt after authorities stepped in to try to cool the rally; the metal settled at $133.18/mt. We expect the government will want to push the prices back below $130/mt, but we struggle to see it falling substantially given the underlying fundamentals, which will likely keep prices in the $120-130/mt range.
Oil futures declined today as the OPEC+ meeting was postponed, causing WTI and Brent to trade at $75/bl and $80/bl, respectively. Gold and silver remained steady, trading at elevated levels of $1,991/oz and $23.70/oz, respectively.
All price data is from 23.11.2023 as of 17:30
