US stocks rebounded from last week’s slump as reports point to limited hospitalisations given the rising number of omicron cases. Restrictions across the world continue to tighten, and the governments are urging people to get the vaccine or a booster jab to maintain immunity. The dollar was marginally higher, and 10yr US Treasury yield edged back up to 1.40%. Elsewhere, German factory orders dropped by 6.9% m/m in October, as demand for goods declined, unlike the US that saw a rise in orders given positive demand in the same month. China stated it would cut the reserve requirement ratio by 0.5pps starting mid-December, releasing more liquidity into the financial system to support the economic slowdown.
Base metals weakened significantly in the first half of the day on the back of the news from China, but some managed to recoup the losses closer to the day-end. Copper breached resistance of $9,500/t as one of the biggest mines in Peru is considering halting production, further tightening the market balance; the metal closed at $9,505/t. Likewise, zinc managed to hold its ground, closing higher on the day at $3,162.50/t. Nickel sold off, piercing $19,800/t; however, appetite below this level was marginal, and the metal closed at $19,820/t. Lead closed lower on the day at $2,196/t. Aluminium softened and closed below the key support level of $2,600/t level at $2,588/t.
Oil futures rose after Saudi Arabia raised crude prices for Asian and US customers, pointing to confidence in the outlook from the demand-side despite the omicron spread. WTI and Brent rallied to $68.31/bl and $71.88/bl. Precious metals were marginally unchanged, with gold and silver trading at $1,782.30/oz and $22.33/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 06.12.2021 as of 17:30