US stocks jumped higher today after the Treasury yields extended their decline. In particular, the most recent comments from Fed policymakers added to the expectation that the rates have peaked, citing the continued price softness as sufficient to suggest that the policy is tight enough to contain inflation. The 10-year yield has dropped lower to 4.35%, while the 2-year yield is now below the 4.80% level. Still, we expect the officials to remain firm on the higher-for-longer rates narrative, trying to keep the yields elevated in the meantime. From macroeconomic data, US consumer confidence rose for the first time in four months in November, supported by an improved outlook regarding the labour market. The dollar sold off once again as a result.
Base metals reversed earlier losses, gaining momentum in the second half of the day following the dollar weakness. In particular, copper struggled below $8,340/t, prompting it to bounce back to $8,473/t; the $8,500/t resistance is standing firm. Aluminium remained broadly unchanged at $2,217/t. Meanwhile, both aluminium and copper cash to 3-month spreads continue to weaken, falling deeper into contango at -$42.50/t and -$89.50/t, respectively. Likewise, nickel rejected prices below the $16,000/t level, jumping back to $16,766/t. Tin gains were marginal, not enough to offset yesterday’s losses, causing it to settle at $23,322/t. In the meantime, we continue to see strong import data into China in recent weeks, and improving RMB is lessening the import losses.
Oil futures jumped higher as OPEC+ members continue to negotiate over output levels; WTI and Brent are now trading at $76/bl and $82/bl. Fed policymakers' remarks pushed precious metals higher, up to $2,035/oz and $24.90/oz for gold and silver, respectively.
All price data is from 28.11.2023 as of 17:30