US stocks continued to strengthen, about to finish the biggest November rally on record, as markets continue to price in expectations of the end of the tightening cycle. In particular, the Fed Bank of Richmond’s President Barkin stated that the central bank should keep the option to hike interest rates on the table in case inflation remains elevated. Meanwhile, US GDP growth rose by 5.2% in Q3 2023, the fastest pace in nearly two years and more than anticipated. At the same time, the PCE was revised lower. Still, the markets are still pricing in the cut by May. This suggests that despite the robust economic growth, investors’ focus has now shifted to the timing and scale of the cuts. We expect that any data that reaffirms this narrative will send yields lower. Indeed, the 10-year yield is now at September lows of 4.28%, while the dollar bounced back to 102.90 after struggling below 102.50.
Another mixed day of trading across the LME exchange. Aluminium and copper were unchanged day-on-day, as prices were supported by $2,200/t and $8,400/t, respectively. Meanwhile, nickel experienced another day of strong gains, pushing the metal back above $17,000/t. While we might see prices above this level in the near term supported by dip buying, we expect that current market fundamentals will create further headwinds for nickel prices into the year-end. Lead continued to fall for the seventh straight day to settle at $2,147/t. Zinc closed at $2,501/t.
Oil futures tried to break higher but struggled to gain momentum. Gold and silver upside paused around $20,42/oz and $24.98/oz, respectively.
All price data is from 29.11.2023 as of 17:30
