U.S. equities rallied following stronger than expected retail sales data, and the reading was 1.7% M/M. Capacity utilization was 76.4%, while industrial production was also more robust than expected at 1.5%. This caused the dollar index to the firm and test 96, while the U.S. 10yr yield has also continued to firm 1.6163%. GDP data for Europe was 3.7% Y/Y and 2.2% Q/Q for Q3. EURUSD has weakened significantly and trades at 1.1339 at the time of writing. European equities were mixed with the FTSE down, but most other indices edged higher. Sentiment in the block remains weak, and we expect EURUSD to weaken as Central Bank policy diverges.
Sentiment on the LME was weak today, with aluminium coming under the strongest selling pressure. Aluminium sold off sharply as we continued to see long liquidations from the funds. However, the long term fundamentals are bullish for aluminium. Prices closed at $2.754.50/t. Copper cash to 3-month spread weakened but remains backwardated at the time of writing, as the 3-month price closed at $9,545/t. SHFE and COMEX prices were also weaker for copper. Nickel failed above $19,830/t and closed at $19,394/t, with the spread at $92/t back. Lead and zinc closed at $2,307/t and $2,223/t. Liquidity in the option and futures market is still poor.
Energy prices recovered from early losses, with Brent pushing through $82/bl towards $82.70/bl, even though OPEC suggest that the oil market will be oversupplied soon. Global crude inventories fell 6.5m b/d. WTI trades at $81.13/t. Precious metals failed to hold onto the intraday highs after comments from James Bullard and strength in the USD and yields. Gold trades at $1,855.96/oz and silver at $24.9/oz.
All price data is from 15.11.2021 as of 17:30