US stocks rebounded after earlier losses seen due to surging energy prices fuelling volatility. US CPI level area out this week and are expected to rebound month-on-month from August lows but still remain relatively muted to spring peaks; producer prices, however, are seen surge higher amid supply chain bottlenecks. The dollar tended higher. The BoE officials have signalled urgency to raise interest rates to curb inflationary pressures in the economy; the 10yr gilt tested 1.20% for the first time since May 2019. Elsewhere, we have seen some softness in the freight rates from China to the US and Europe, the first consistent decline since March, a sign of easing backlog.
Metals on the LME were mostly higher yesterday as increased risk sentiment took hold of the market. Aluminium prices jumped to test at $3,072.50/t level, the highest since July 2008, driven by a continued squeeze on the power usage, closing at $3,064/t. Prices received an additional boost after the EU imposed an anti-dumping duty on flat-rolled aluminium from China, however, excluding cans, used car panels and aircraft parts. Aluminium cash to 3-month spread widened out to -$19.50/t. Likewise, copper rose to mid-September levels of $9,570/t, to close at $9,543/t. Zinc gained ground throughout the day, testing the $3,240/t resistance level to close near the highs at $3,230/t. Tin and lead were seen marginally higher, closing at $36,382/t and $2,227.50/t, respectively. Only nickel was softer on the day, closing at $19,119/t.
Oil futures rallied, with Brent topping $85/bl yesterday, as the continued power crisis in Europe weighs on energy demand this winter. WTI traded at $81.09/bl. Precious metals have remained broadly unchanged, with gold and silver trading at $1,758.30/oz and $22.69/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 11.10.2021 as of 17:30
