US stocks strengthened today. CPI data from the world's largest economy came out mostly in line with expectations, pointing to inflation stickiness, with the core reading in November unchanged from the previous month at 4% YoY. Elevated price pressures will likely prompt the Fed to reiterate in their statement tomorrow that interest rates need to stay higher for longer. While markets do not expect any changes to the interest rates this week, investors price in interest rate cuts as early as March 2024. The policymakers' narrative tomorrow will paint a better picture of the timing of the first interest rate cuts next year. The dollar remained mostly flat, hovering below 104 level while the 10-year US Treasury yield stood at 4.26%.
Panama's Supreme Court ruled that First Quantum's contract to operate the mine was unconstitutional, ordering it to end its operations in Panama (extraction, processing, refining, transportation, export, and sales activities). This decision could result in a loss of more than 500kt of copper. Moreover, with the continued increase in Chinese refined output, highlighted by a 1.4% y/y increase in concentrate imports to 2.44mt in November, further pressures should be felt on concentrate demand. We expect TCs to drop lower as a result. That decline is set to be more pronounced for Chinese TCs, given the growth of low-cost smelters' capacity is above concentrate growth. Still, copper continued to follow the dollar moves, keeping above $8,300/t at $8,355/t. Aluminium held its supporter at $2,117/t, closing at $2,121/t. Lead and zinc remained broadly unchanged at $2,037.50/t and $2,430.50/t, respectively.
Gold price remained largely unchanged at $1,981/oz, while silver continued on the downside and stood at $22.71/oz. News about increased Russian oil shipments today led the oil price to plunge, with WTI and Brent decreasing to $68.85/bl and 73.48/bl, respectively.
All price data is from 12.12.2023 as of 17:30
