Global equities were a mixed bag yesterday as investors awaited the Fed minutes, we do not expect a change in language or rhetoric this close to Jackson Hole. The market expects the Fed to taper by the end of the year and anticipate some signal next week. The dollar index firmed to 93.216 at the time of writing, as housing starts declined by 7% M/M but building permits increased by 2.6% M/M and mortgage applications declined 3.9% in the week to 3.9%. Major European stocks were down, as Euro area CPI was 2.2% Y/Y, with core CPI at 0.7% Y/Y.
LME prices declined yesterday as selling pressure was robust. Protracted selling pressure caused copper prices to test support around $9,00/t and closed at $9,042.50/t. The lead cash to 3-month spread continued to tighten and settled at $204.5/t back but the flat price closed on the back foot at $2,289.50/t. Nickel broke below key support at $19,000/t to close at $18,887/t. Zinc also broke through a key support level and settled at $2,985/t. The cash to 3-month spread is still in a backwardation at $13.76/t and the flat price settled at $2,555/t.
Energy prices failed to hold onto the intraday highs with Brent rejecting resistance at $70/bl and trading at $68.55/t at the time of writing, with WTI at $65.97/bl. Precious metals also suffered yesterday with prices trading at $1,782.62/oz and silver at $23.45/oz.
Geordie Wilkes, Head of Research