NFPs showed that there is certainly life in the U.S. labour market as 528,000 jobs were added; this has caused traders to expect more rate hikes in the U.S. as the economy while slowing, has room for higher rates. Labour participation was 62.1% in July as average hourly earnings increased 0.5% M/M. Treasury yields reached 2.865% as the USD strengthened with the index at 106.735, and cable slipped towards 1.20. Equity markets are lower at the time of writing, as investors now expect similar-sized rate hikes from the Fed.
LME metals were well supported today, with all but tin gaining ground, tin closed at $24,455/t, and the cash to 3-month spread settled at $160/t back. Zinc was marginally higher, reaching $3,529.5/t and this caused futures to close at $3,488.5/t; zinc continues to be volatile, with trading conditions incredibly tricky due to poor liquidity. Lead closed off the highs at $2,070/t, and the spreads tightened once again to $24/.75t back. The low inventory environment and poor liquidity is causing spreads to move into backwardation, especially with the energy risk to production across the globe. Aluminium was well bid today, which caused prices to test $2,454/t; the market trades at $2,420/t at the time of writing. Copper testes appetite around $7,950/t, but this level held firm, and prices edged lower to $7,875/t.
Energy prices gained ground, reaching $95.49/t and 89.72/t for Brent and WTI, respectively.