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US stocks fluctuated as investors continued to respond to the Fed’s decision to begin to taper this month. The 10yr US Treasury yield softened into 1.5310%, as markets are no longer pricing in some of the rate hikes in 2022, after the Fed alluded to keeping interest policy unchanged in the meantime; the dollar rallied. US initial jobless claims fell to 269,000 in the week ending October 30, the lowest since March 2020; tomorrow’s job report is forecast to increase up to 450,000, after a lacklustre 194,000 growth in the previous month. US productivity fell by the most since 1981 in Q3 2021, as the economy fared the worst wave of lockdown restrictions. The pound sold off after the BoE decided not to hike interest rates as was previously anticipated, whilst also cutting the 2022 growth outlook to 5%, down from 6%.

Metals weakened on the LME market yesterday after China cancelled its preferential electricity prices in some provinces, such as Yunnan. Aluminium sold off to test the support level at $2,550/t before closing marginally higher at $2,554.50/t. Copper was stronger in the first half of the day, but selling pressures prevailed, pushing the metal below $9,500/t support level down to close at $9,439/t. Zinc was another strong seller after it tested resistance at $3,373/t; the metal closed at $3,240.50/t, and the cash to 3-month spread tightened marginally into $45/t. Nickel and lead were mostly range-bound but closed lower on the day at $19,141/t and $2,348/t.

Oil futures rebounded in the second half of the day as the OPEC+ rejected the need for higher oil output, approving a 400k b/l production hike in December. This resulted in the futures being broadly unchanged on the day, with WTI and Brent trading at $80.96/bl and $82.39/bl. Precious metals gained ground, with gold and silver edging up to $1,792.88/oz and $23.87/oz, respectively.

For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.

All price data is from 04.11.2021 as of 17:30


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