US stocks strengthened today following worse-than-expected GDP data from the world’s largest economy which confirmed that the prolonged period of high borrowing costs has had an impact on US economic performance. GDP data pointed to economic growth in Q3 at 4.9% YoY, compared to 5.2% in Q2. At the same time the labour market remains tight with both initial jobless claims and continuing claims in the first weeks of December below expectations at 205k and 1865k, respectively. The dollar depreciated against other major currencies and stood at 101.88 while the 10yr US Treasury yield remained mostly flat, hovering around the 3.85% level.
Another day of lacklustre activity across the LME as the market heads into the year-end. Aluminium downside stalled as the metal struggled below the $2,200/t mark, close at $2,244/t. Likewise, copper remained elevated at $8,595.50/t. We believe that as we start the new year, the seasonal activity will pick up and push prices above the robust $8,600/t resistance level. With Chinese pessimism now fully priced in, we expect any policy support and data improvements to push nickel prices higher in Q1 2024. Moreover, while we remain constructive on the dollar, any downside will also create further tailwinds for copper prices. Lead and zinc remained unchanged at $2082.50/t and $2573/t, respectively.
Both gold and silver jumped higher and stood at $2042.84/oz. and $24.38/oz., respectively. Oil fluctuated today with WTI trading at $73.45/bl. while Brent appreciated to $78.95/bl.
All price data is from 21.12.2023 as of 17:30