US stocks closed the week on the front foot on the back of positive economic data. US nonfarm payrolls increased by 531,000, larger than was forecasted, indicating a recovery in the labour market performance; the unemployment rate fell to 4.6%. The factory employment jumped by 60,000, the most since June 2020, a positive sign of hiring in the industrial sector. The dollar softened, and the 10yr US Treasury yield broke below the 1.50% level for the first time since the beginning of October.
The base metals complex consolidated yesterday after suffering another week of consistent declines. Aluminium, was one of the strongest sellers, losing as much as 9% during the week; the metals closed at $2,556.50/t. Copper prices were well supported and tested resistance at $9,400/t and closed at $9,518/t; the cash to 3-month spread tightened into $235/t. Nickel was well bid in the second half of the day, testing the resistance level of $19,570/t before closing below at $19,434/t. Zinc was range-bound but closed lower on the day at $3,228.50/t. We watch out for Sunday’s trade data from China which is likely to point to increased purchases of energy and commodity goods, as domestic production struggled to keep up due to production constraints.
Oil futures jumped after a lack of clarity from President Biden as he failed to mention the potential release of petroleum from strategic reserves. WTI and Brent traded at $81.15/bl and $82.60/bl. Precious metals were also stronger, with gold and silver edging up to $1,815.25/oz and $24.09/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 05.11.2021 as of 17:30