US stock market sell-off accelerated today, with Nasdaq plunging by around 5%, as the risk-on sentiment subsided. US initial jobless claims totalled 881,000 in the week ending August 29th, a drop from last week, painting a mixed picture around the labour market. The US trade deficit increased to the widest point in 12 years, pointing a slow economic recovery ahead. Moreover, the ISM service index fell to 56.9, dropping from a one-year high in July. The dollar advanced, and the yield on the 10yr US Treasuries softened further into 0.6266%.
Metal prices were weaker today due to the weakness in the macro, except for lead which was well supported above $1,940/t and closed at $1,944/t. Copper prices sold off to test appetite at $6,550/t, but support at that level triggered a close at $6,563.50/t. Nickel saw the strongest selling today but was supported above $15,000/t and closed at $15,095/t. Aluminium remained under pressure closing at $1,780/t, and the cash to 3-month spread tightened into -$35.55/t. Zinc tested the $2,485/t level in the second half of the day, however, closed near day’s low at $2,514/t. Iron ore has reached a record high today, driven by positive steel demand outlook, closing at CNY862.50/mt.
Oil futures dropped as stronger dollar and fears of oversupply took hold of the market. At the time of writing, WTI and Brent trade at $40.96/bl and $43.69/bl. Palladium touched a 5-month high on news of improving car sales; however, gold and silver were down on the day, edging down to $1,927.57/oz and $26.72/oz respectively.
