U.S. stocks declined yesterday after the market speculated on the implications of a change in the Fed leadership. The dollar was marginally unchanged, and the 10yr U.S. Treasury yield fell into 1.4271%, September lows. US PPI accelerated further in October, up to 8.6% y/y, driven in large by the high cost of goods, meanwhile, Chinese factory inflation soared to 12.3% y/y, a 26-year high. Both indicators point to no ease in price growth, and this should add further pressures on CPI readings this month.
LME prices continued to weaken as investors digested the weakening property market in China. Aluminium was subject to moderate selling pressure in the second half of the day, piercing the support level at $2,560/t and closing higher at $2,556.50/t. Copper tested resistance at $9,700/t before closing at $9,553/t. Lead and nickel prices were softer, closing at $2,339.50/t and at $19,401/t respectively. Tin and zinc prevailed, closing marginally higher on the day, at $37,408/t and $3,281.50/t, respectively. All metals except aluminium are in backwardation, outlining the tight physical market and low stocks.
Oil futures rose after the statement that President Biden will be looking into the EIA’s outlook report to address the rising energy prices. WTI and Brent traded at $82.92/bl and $84.94/bl. Precious metals softened, with only gold marginally higher on the day at $1,825.92/oz; silver traded at $24.17/oz.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 09.11.2021 as of 17:30