US stocks retreated today after Fed's Chair Powell stated that solid economic performance alongside persistent inflation could warrant earlier than expected end to asset purchases. He has also noted that inflation can no longer be regarded as transitory. Meanwhile, US consumer confidence fell to a 9-month low as higher prices, and now, the rising number of cases in the country weighed on consumer outlook. The dollar rallied, and the curve continued to flatten, with 2yr and 10yr US Treasury yields at 0.5353% and 1.4443%, respectively. Euro-area inflation jumped to a record high of 4.9% in November, adding uncertainty to ECB guidance next month. China's manufacturing PMI rebounded in November, while non-manufacturing continued to decline, as the producers stated that the input price pressures have eased.
Metals prices suffered today as we continued to see more cases of the new COVID variant worldwide and worries over the vaccine's efficacy on Omicron. Copper fell below the support level of $9,450/t, closing lower at $9,442.50/t. Aluminium was mostly range-bound, finding support above $2,610/t to close at $2,625/t. Nickel tested the resistance of $20,300/t once again, but this level held firm, and the prices softened to close at $19,897/t. Only lead managed to close higher on the day at $2,275.50. All base metals cash to 3-month spreads are backwardated but not as steep as previous months. Inventories are low and declining; we expect this to remain the case in the near term, keeping premiums high and the physical market tight.
Oil futures declined once again on the back of the virus, complicating the demand outlook. WTI and Brent are trading at $66.35/bl and $70.65/bl. Precious metals sold off in the second half of the day after Powell's statement, with gold and silver falling to $1,774.21/oz and $22.78/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 30.11.2021 as of 17:30
