US stocks jumped higher after the final labour data was released this week, which pointed to an improvement in labour conditions. US nonfarm payrolls strengthened to 199,000 in November, with a pickup in both employment and wages; the return of auto workers helped to boost the figure. The unemployment rate dropped to 3.7%. Treasury yields strengthened as a result, with the 10-year jumping to 4.25%. Froward swaps reflected the change in sentiment, reducing the probability of a cut next year by 10%. Still, the case for multiple cuts next year is present, suggesting investors are not convinced strong economic growth is enough to avert the Fed's monetary path. The dollar continues to fluctuate around the 104 level.
Metals trading had a mixed outcome this week, with a negative sentiment prevailing, prompting prices to test multi-month support levels. The Chinese sentiment remained downbeat while a stronger dollar weighed on risky assets, which highlighted the growing concerns in the financing segment of the economy. On copper, this week's decline seems to be a slight retracement from the trend seen in recent weeks. However, since the trend support is still intact, the prices are likely to remain high above $8,400/t for the time being; the metal closed at $8,448.50/t. We expect that negative Chinese sentiment is now fully reflected in the market, and the base metals are likely to find support at these levels before experiencing a marginal recovery at the start of next year. Aluminium struggled below $2,130/t; lead and zinc closed at $2,025.50/t and $2,399.50/t, respectively.
Oil futures jumped higher, above $70/bl, following the announcement that the US is planning to replenish some of the oil reserves. Gold and silver sold off given the positive economic performance release, prompting them to trade at $2,005/oz and $23.10/oz, respectively.
All price data is from 08.12.2023 as of 17:30
