US stocks continued their decline, driven by expectations from the central banks across the world to continue their tightening cycle amidst persistent inflation. US companies increased jobs by the fewest amount since early 2021 in August, according to revamped ADP figures, which suggests that hiring is slowing. All eyes now turn to the Friday’s non-farm payroll numbers. The dollar edged lower, while the 10yr US Treasury yield continued to trace higher into 3.12%. Meanwhile, Eurozone inflation increased to another record in August, growing by 9.1% y/y, further strengthening the case for the ECB to hike rates this year. The swaps are now pricing in a 125bps hike by October.
The downside momentum prevailed on the LME market from yesterday, only with nickel seeing a slight rebound day-on-day; it settled at $21,411/t by the end of the day. Aluminium held up above the support at $2,400/t; however, it later breached this level down to $2,359/t. Likewise, copper was supported by $7,900/t as it was seen edging higher, but downside momentum brought the metal to $7,801.50/t. Chile reported an 8.6% y/y decline in production in July, following a 7.0% drop in June. Water restrictions presented some headwinds for producers. To encourage investment into the industry, the government is said to be willing to hold discussions over proposed tax hikes to help distribute wealth. Lead and zinc closed lower at $1,950/t and $3,459.50/t, respectively.
Oil futures closed another month on the back foot, with today’s move largely attributed to diminishing global demand prospects. WTI and Brent now trade at $90/bl and $96/bl. Precious metals behaved in a similar manner, as both gold and silver edged down to $1,719/oz and $18.13/oz, respectively.
For more in-depth analysis of base and precious metals, our Q3 2022 Quarterly Metals report is out now!
All price data is from 31.08.2022 as of 17:30