US stocks dipped at the opening following softer-than-expected labour market data. August non-farm payrolls (US jobs report) showed a weaker increase in hiring, with 142,000 jobs added compared to the expected 165,000. However, this figure still showed a significant rise from the downwardly revised 89,000 recorded in July. This reflects the trend observed in recent months—markets are biased toward signs of US economic weakness, leading to sharp sell-offs when macroeconomic data falls short of expectations, even if those expectations are inflated. Investors responded by increasing their bets on a 50bps interest rate cut in September, with forward swaps now pricing in almost a 50% probability of such a move. The dollar hovered around the 101 level, while the 10-year US Treasury yield dropped to 3.68%.
Another day of moderate softness as the base metals complex struggled to maintain gains above key resistance levels, prompting the market to close the week on the back foot. There is a lack of incentive to urge prices out of the current ranges as Chinese confidence wanes and the mined supply continues to deplete. We expect markets to remain rangebound in the near term. In the meantime, the complex continued to soften, with aluminium leading the way, declining back below the $2,400/t level to $2,342/t. Copper held its nerve as it struggled above $9,200/t. The rest of the metals followed suit lower.
Precious metals declined today as markets try to anticipate the Fed’s actions following the likely September cut. Gold remained above $2,500/oz, while silver dipped to $28.4/oz. Worse-than-expected US economic data also placed downward pressure on oil prices, which have been falling recently due to expectations of an OPEC production increase. WTI dropped to $68/bbl, its lowest level since mid-2023, while Brent decreased to $71.50/bbl.
All price data is from 06.09.2024 as of 17:30
