US stocks softened yesterday. US inflation rose by 6.2% y/y in October, the fastest growth since 1990, as supply chain disruptions and strong demand continue to attribute to rising inflationary pressures; the month-on-month figure has picked up to 4-month highs. This should further worsen consumers’ purchasing power, which is already diminishing, outlined by the jump seen in energy bills in October. The price of electricity increased by 6.5% y/y, the highest jump since 2009, while gas utilities were up by 28%. US mortgages, however, dipped below 3.0%, following the recent decline seen in Treasuries. The dollar rallied. The 10yr US Treasury yield increased up to $1.5204%, and the 10yr TIPS rose to levels last seen in August. The short-term debt, in particular, was significantly hit by the inflation data with 2yr Treasury yields rallying up to test 0.5%.
Base metals fluctuated on the back of the US inflation figures. Nickel rallied in the second half of the day, testing resistance at $19,820/t, closing at $19,754/t. Aluminium was well bid above $2,570/t for most of the day, closing higher at $2,578/t; cash to 3-month spread tightened into -$18.50/t. Lead and zinc were mostly range-bound but closed higher on the day at $2,338.50/t and $3,292/t, respectively. Copper fluctuated but closed below the support level of $9,550/t at $9,533/t. A key event is the meeting between Joe Biden and President Xi next week.
Oil futures declined, with WTI falling to $82.81/bl as crude inventories in the US rose. Brent softened into $84.09/bl. Precious metals shot up in the second half of the day, with silver rallying up to $25.02/oz, gold was up to $1,857.92/oz.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 11.11.2021 as of 17:30