US stocks edged higher, as investor confidence improved, however, remained on track for a weekly decline. US inflation accelerated in August, growing by 1.3% y/y, above market expectations, partly supported by gains in used cars. In the latest round of trade talks, China retaliated, targeting US diplomats in China, after the recent limit by the Trump administration towards the Chinese diplomats. In the UK, new daily cases of COVID-19 are spreading rapidly, with the R number rising above 1 for parts of the country. The UK economic output surged 6.6% m/m in July, boosted by restaurant activity, however, risks of rising job losses could threaten long-term recovery.
The sentiment on the LME was tentatively positive, only with aluminium closing down on the day at $1,775/t. Copper prices were well supported and tested resistance at $6,750/t on falling stockpiles, closing just off the highs at $6,739/t. Nickel was under pressure in the first half of the day but strengthened, later on, testing the resistance level of $15,100/t, to close at $15,094/t. Nickel cash to 3m spread tightened further to -$45.01/t. Zinc and lead consolidated, closing at $2,471/t and $1,889.50/t respectively. Iron ore was higher on the day, closing at CNY828.50/mt.
Oil futures were range-bound, with WTI and Brent trading at $37.54/bl and $40.08/bl. Precious metals traded higher, edging up to $1,948.98/oz and $26.91/oz.