We saw risk-off sentiment captivate financial markets today. Strong selling pressure caused risk and safe-haven assets to weaken amid rising COVID-19 restrictions. In Europe, we continue to see cases rise, the probability of more lockdowns is also rising, which will hinder economic recoveries and prompt governments to prolong stimulus measures, increasing debt levels, a worry for fiscally weak countries. U.S. equities have weakened, taking the lead from major European indices which all closed down over 3%. Christine Lagarde has tried to instil calm into European markets after suggesting there is the capacity for further stimulus if needs be.
LME sentiment was weak today as protracted selling pressure gripped the market due to COVID-19 uncertainty and a supported US dollar. Zinc lost the most ground, after failing above $2,550/t to break through support at $2,500/t and close at $2,458.5/t. Nickel broke back below $15,000/t and found support at $14,300/t to close at $14,541/t. We saw protracted selling pressure cause the copper market to close below $6,700/t at $6,691.50/t; the cash to 3 spreads have widened as well to $27/t back after closing at $40.25/t on Friday. Lead and Aluminium prices also closed lower today at $1,888.5/t and $1,779.5/t, respectively.
Oil prices did not escape the sell-off today with market participants pointing to Libya bringing oil back to the market, likely to increase an already rising OPEC+ supply. Brent trades at $41.28/bl with WTI at $39.02/bl, at the time of writing. Silver and gold were subject to strong selling pressure and trade at $24.35/oz and $1,902/oz, respectively at the time of writing.