Global stocks started the week on the front foot as risk appetite dictated the market. Investors remain focused on the Jackson Hole later this week when we expect the Fed to add clarity to their stance on tapering. Data in the US was positive yesterday, but the manufacturing PMI missed expectations but remain above 60 at 61.2, the eurozone manufacturing PMI was also high at 61.5. The dollar was weaker today which supported commodities, with energy doing particularly well and in turn supporting energy stocks.
Sentiment on the LME was strong with all prices higher except for tin. Copper prices were supported at $9,060/t and traded back through $9,200/t to close at $9,273.5/t. Aluminium managed to close back above $2,600/t at $2,602/t, the cash to 3-month spread settled at $21.50/t back. Lead and zinc are well bid to $2,275/t and $2,929/t respectively. The lead cash to 3-month spread is still in a steep back at $177.25/t but is weaker than last week. Nickel once again struggled above $19,000/t but the market closed at $18,893/t.
Energy prices were well bid yesterday as risk appetite and a weaker dollar prompted prices to break through key resistance areas and trade at $68.84/bl and $65.78/bl respectively. Gold was well supported today, and pushed back above $1,800/oz, and trades at $1,805/oz at the time of writing. Silver trades at $23.67/oz.
Geordie Wilkes, Head of Research