US equities fell at the opening today as caution took hold. The dollar edged slightly lower, trading at 103.1, while the 10-year US Treasury yield dipped below 4.05%. Markets are currently pricing in a 92% chance of a 25bps cut at the upcoming Fed meeting in November. We expect the dollar to remain in the 102.5–103 range over the coming weeks as attention shifts to the elections.
Another day of softer performance across the base metals complex as markets are losing confidence in China’s stimulus measures. While stimulus may boost short-term optimism, markets recognize the long-term growth constraints that won't be solved by additional spending. More fiscal and monetary policy support is likely to be announced in the coming weeks, but we do not believe that this will be enough to bring consumer confidence back. In the meantime, aluminium and copper softened into $2,570.50/t and $9,530.50/t. Lead and zinc remained above the robust support levels of $2,000/t and $3,000/t.
Gold regained ground after yesterday’s losses, trading at $2,660/oz. Ongoing geopolitical tensions in the Middle East and expectations of further monetary easing from the Fed continue to provide tailwinds for the precious metal. We expect gold to break new record highs in the coming weeks. Silver followed suit, appreciating to $31.5/oz. Despite escalating tensions between Israel and Iran, oil prices continued to decline today, with WTI and Brent crude trading at $70.2/bbl and $73.8/bbl, respectively.
All price data is from 15.10.2024 as of 17:30