US stocks rose to record highs on Friday after Powell’s remarks at the Jackson Hole symposium. Indeed, the Fed confirmed that the withdrawal of stimulus should take place at the end of the year, and it would be gradual. Meanwhile, US personal spending growth moderated in July, as the price index rose by 0.4% m/m and 4.2% y/y. The dollar sold off, and the 10yr US Treasury yield softened to 1.3155%. Likewise, stocks climbed in China, as the central bank signalled it would reduce the reserve requirement ratio for banks to support the economy.
LME metal prices were on the front foot today, apart from lead and zinc, which closed lower on the day. Nickel prices were well supported and tested resistance at $19,049/t; prices closed lower at $19,011/t. Copper was well bid in the second half of the day, testing the resistance level of $9,458/t before closing below at $9,410/t; the cash to 3-month spread widened out to $13.75/t. Aluminium advanced in the first half of the day as some Chinese smelters were told to limit output, supporting prices above $2,620/t, the metal closed at $2,649.50/t. SHFE aluminium prices strengthened, closing at CNY20,685/mt; the next day, prices breached highs of CNY21,200/mt. Lead and zinc softened into $2,295.50/t and $3,002/t respectively.
Oil futures climbed higher, with WTI climbing to its best week since June 2020. WTI and Brent surged to $68.65/bl and $72.41/bl. Precious metals were all stronger after Powell’s statement, with gold and silver edging up to $1,814.16/oz and $23.98/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 27.08.2021 as of 17:30