The sell off deepened across the market today, with S&P falling as much as 1.87%. This is partly attributed to the UK’s plan to cut taxes to help ease inflationary concerns that the BOE is struggling to quell. Treasuries reversed the earlier decline, sending 10yr and 2yr US yields back up to 3.82% and 4.20%, respectively. Likewise, the dollar hit a record high of 112. At the same time, the euro declined to the lowest level since 2002 while the pound tested the lows not seen since 1985. Yuan extended its losses, falling to the lower end of the range that we saw took place during the currency shock in 2015. Meanwhile, business activity gauges in the US and the EU pointed to further losses suffered in the sectors as demand continues to diminish and the number of new orders decline.
In line with other market, metals on the LME took a hit across the complete. Tin lost as much as 6.5% falling to $20,220/t. Aluminium followed suit, falling below the support level of $2,200/t and declining to $2,165/t, further deepening lows not seen since March 2021. Copper, on the other hand, managed to find support at $7,400/t in the second half of the day, still yet to reach the lows seen in July; the metal closed at $7,433/t. Lead and zinc closed lower at $1,804/t and $3,008/t, respectively. Meanwhile, iron ore futures fluctuated around $98/mt as China’s steel hub Tangshan lifted the toughest lockdown restrictions in some areas, allowing for resumption of activity in the region. While this is likely to have little material demand on steel, the news help support the sentiment.
Oil headed for the longest weekly decline, with WTI and Brent closing the week at $78/bl and $86/bl, respectively. Despite their safe haven properties, even precious metals struggled given the strength of the dollar, with gold and silver declining further into $1,648/oz and $18.88/oz.
For more in-depth analysis of base and precious metals, our Q3 2022 Quarterly Metals report is out now!
All price data is from 23.09.2022 as of 17:30