Markets Pare Positions as Month Closes

Macro

US stocks opened lower today, influenced by the increasing risk of a government shutdown, weighing on the risk-on sentiment. The US is on track for a shutdown after President Trump's recent meeting with congressional leaders ended without an agreement, effectively pausing government operations. This could also affect the release of upcoming labour figures this week, potentially introducing moderate volatility into US assets.

From a macroeconomic perspective, US consumer confidence fell to 94.2 in September, marking a five-month low due to growing concerns about job prospects and the overall economy. Despite this subdued sentiment compared to earlier this year, consumer spending has remained resilient, contributing to a balanced economic outlook.

Markets are closely watching the upcoming US labour figures to better understand the Fed's conviction regarding its planned interest rate cuts for the remainder of the year. Specifically, the ADP employment change is projected to soften moderately, decreasing to 51,000 from 54,000. Nonetheless, we believe that, given the overall resilience of US growth, as seen by a robust service sector and persistent inflation, the Fed is likely to be cautious in implementing rate cuts. Therefore, we anticipate that a 25bps cut by the end of the year is more probable. The dollar continued to weaken, dipping to 97.87, while the 10-year US Treasury yield remained steady at 4.13%.

Base Metals 

Base metals opened higher this morning, aiming to reach new highs due to a weaker dollar and growing speculative interest across the market. However, the upward momentum fell short, and markets moderated slightly today. Despite today’s softness, yesterday's rally provided a much-needed sentiment boost, indicating that last week's appetite for gains was not just driven by a temporary supply shock. Instead, we believe that the Grasberg's force majeure acted as a key incentive in a market already poised to break away from the rangebound conditions that have kept markets stable for the past four months.

In particular, copper, which, after a jump to $10,400/t yesterday, attempted to test this level again before softening to $10,268/t by the end of the day. Compounding this is the tightening of spreads and forwards. Additionally, the absence of Chinese market participants due to holidays could lead to increased volatility over the coming days, with market appetite appearing to be skewed to the upside. Although, the potential for significant upside may be tempered by a key resistance level of $10,500/t, which will be crucial for any sustained break above current levels.

Other metals are showing mixed performance; aluminium is holding steady at $2,680.50/t, while lead has declined to $1,988.50/t. Tin's upward movement has stalled after reaching $35,500/t yesterday, leading to a moderate correction down to $35,410/t. Currently, the market seems to be favouring purchases on any dips.

Across the Atlantic, European stocks weakened following the news that China's state-run iron ore buyer has temporarily halted purchases of any dollar-denominated cargoes from the Australian miner BHP. As a result, the price of iron ore, which had been supported above the $105/mt mark for the past couple of weeks, has dropped to $103.50/mt.

Precious Metals and Oil

Oil futures have declined as OPEC+ plans to discuss accelerating its latest round of supply increases. At the time of writing, WTI is trading at $62/bbl, while Brent is at $67/bbl. In line with other risky assets, gold's upward momentum has halted today, settling at $3,837/oz after reaching a new record high of $3,870/oz this morning as investors appear to be participating in profit-taking as the month comes to a close. Given the ongoing fiscal, political, and trade uncertainties, it is unlikely that gold's upward trend will reverse in the near term.

All price data is from 30.09.2025 as of 17:30