US stocks declined after a softer gain in inflationary data, which is more likely to give the Fed more flexibility on when to begin tapering; however, we do not believe that this will significantly alter their course. US CPI increased by 0.3% m/m in August, the smallest gain in seven months, while still beating the 5% y/y mark. The dollar softened slightly, and the 10-yr US Treasury yield sold off to reach 1.2634%. Meanwhile, China is faced with another wave of coronavirus infections as it locked down a city in the Fujian province, putting additional strain on an already moderating economy. The UK will begin to give out booster shots to those over 50 as part of its winter plan to stall the spread of the virus; lockdowns have also been reintroduced as a possibility if the number of cases gets out of control.
Another day of lacklustre performance on the LME yesterday. At the same time, commodity shipping rates have posted the biggest daily gain in a decade, as average rates for bulk carriers continue to beat multi-year highs. Aluminium lost the most ground, breaching the support level of $2,850/t to close at $2,831/t. Copper weakness moderated after finding support at $9,400/t to close marginally higher at $9,442/t; cash to 3-month spread has widened out to -$15.75/t. Nickel fluctuated but ended up closing marginally lower at $19,623/t. Zinc and lead were also softer, closing on the back foot at $3,052/t and $2,272.50/t.
Oil futures continued to gain ground on a more subdued price gain in the US, despite the statement that China would sell some oil from its strategic reserves. WTI and Brent edged up higher to $70.54/bl and $73.61/bl. Safe havens, such as gold and silver, were seen marginally higher in the second half of the day, increasing up to $1,806.16/oz and $23.84/oz.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 14.09.2021 as of 17:30
