US stocks recovered after a strong sell-off seen at the end of last week as markets reassessed the impact of the new variant on their outlook. Regardless, governments across the world began to implement restrictions in hopes of limiting the spread of infections. US home purchases jumped up to a 10-month high in October, signalling a robust demand. The dollar and the 10yr US Treasury yield were both marginally unchanged on the day. Meanwhile, inflation in Germany spiked by more than expected in November, up by 6% y/y, the highest since 1992.
Base metals started the day off on the front foot as investors digested the news of the new variant. Copper has been supported above $9,550/t for most of the day, closing marginally higher at $9,577.50/t; cash to 3-month spread weakened to $85.00/t. Likewise, aluminium was seen marginally higher on the day, as the metal closed at $2,630/t. Lead and zinc were mostly range-bound, closing at $2,270.50/t and $3,198/t, respectively. Nickel tested the resistance of $20,379/t in the first half of the day; the metal closed below that level at $20,141/t. Even if this variant is as strong as previous ones and we see more restrictions, this may also be bullish for metal demand due to more supply-chain bottlenecks, a more dislocated market, and as we know, lockdowns are bullish end-user demand.
Oil futures recovered from last week’s slump in line with broader markets, and now WTI and Brent are trading at $70.85/bl and $74.78/bl. Precious metals, such as gold and silver, softened as the need for safe havens eased today, with gold and silver trading at $1,784.23/oz and $22.80/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 29.11.2021 as of 17:30
