US stocks edged higher yesterday after positive corporate earnings results. Housing starts softened in September, falling by 1.6% m/m. Construction output had also declined in Europe, falling as much as 1.6% y/y, the lowest since February this year, when the bloc was under strict lockdown measures. The dollar weakened while the 10yr US Treasury yield breached 1.62%. China’s property and construction sectors weakened in Q3, the first quarterly decline since the start of the pandemic, weighed down by the real estate performance.
Metals on the LME sold off in the second half of the day, enough to offset earlier gains. Another day of weakness for zinc as it fell to test the support level of $3,500/t before closing marginally higher at $3,508/t. Copper fell back to $10,070/t levels as inventories continue to draw down to the lowest levels in 50 years; cash to 3-month spread has softened relative to the previous day; now at $338/t and the metal closed at $10,149.50/t. Aluminium tested $3,225.50/t highs once again before falling below the previous day’s close to $3,112/t. Nickel was the only base metal that gained ground yesterday, testing the September levels of $20,595/t before closing at $20,050/t. Lead was mostly range-bound but closed lower at $2,376/t.
Oil futures fluctuated in the latter half of the day on the back of continued concerns surrounding the energy crisis. WTI and Brent were at $83.65/bl and $85.33/bl. Russia signalled that it would not go out of its way to provide extra gas to Europe to help ease energy concerns. Precious metals gained ground on the back of dollar weakness and expectations of earlier interest rate hikes by central banks, with gold and silver up to $1,767.90/oz and $23.81/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 19.10.2021 as of 17:30