US stocks rose the most since July ahead of the Fed decision and increased liquidity by the Chinese authorities into Evergrande. Powell said that the US central bank could begin tapering asset purchases “soon”, which could come as soon as the next meeting in November, and complete the programme by the middle of next year. While interest rates remained unchanged, the officials revealed that rate hikes might come sooner than expected. US sales of previously owned homes in the US fell in August, suggesting a moderating demand given low inventories and high prices. The dollar sold off sharply, and the 10yr US Treasury yield weakened marginally. The Bank of Japan has left its monetary policy unchanged, despite offering a muted outlook in regards to exports and factory output, as supply chain bottlenecks continue to mount.
LME base metals rallied after Beijing intervention to control the spiralling real estate crisis. Tin gained the most ground, as it found resistance at $35,676/t to close lower at $34,997/t. Next in line was copper, increasing by 3.40% in the first half of the day to test $9,314/t level; the metal closed at $9,286/t, and cash to 3-month spread widened out to -$15.75/t. Nickel fluctuated but remained supported above $18,800/t to close at $19,221/t. Zinc consolidated to close at $3,025.50/t. Lead prices softened during the day, falling to $2,110/t, the lowest level since April, as Shanghai inventory levels continued to break record highs; the metal closed at $2,113.50/t.
Oil futures gained ground after the US inventory report pointed to another week of drawdowns, falling below the October 2018 levels. WTI and Brent increased up to $71.72/bl and $75.70/bl. Precious metals strengthened, with gold and silver trading at $1,777.56/oz and $22.93/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 22.09.2021 as of 17:30