Market Insights & Analysis

Read our analysts' daily briefings, together with our Market Snapshot reports.

22 Feb 2016 08:07

The pound sterling traded back towards a three week low against the dollar as Brexit fears saw investors pull out of the currency. Japanese PMI data released in the early hours of the morning saw manufacturing activity slow sharply in February. Despite the less than impressive Japanese PMI data, Asian equity market started the week on the front foot.

17 Feb 2016 08:19
Three month LME nickel futures managed to hold onto previous gains yesterday as prices opened firmly around the previous session’s close and traded towards $8,350/tonne. For now though, Chinese investors seem cautiously optimistic as risk appetite fuelled by PBOC assurances and positive sentiment after the Chinese New Year conflicts with Chinese debt concerns. Spot gold prices gained some support towards $1,200/oz during overnight trading despite moves lower testing appetite for prices around $1,190/oz. Front month Brent crude futures struggled to push past the 50 day moving average yesterday as the global benchmark was subjected to a protracted sell-off throughout much of the day.
15 Feb 2016 08:30
Bullish moves for LME nickel prices overnight with the three month rolling forward garnered support at Friday’s close and rallied as much as 5.6% higher overnight as Chinese investors returned to market after the week long Chinese New Year celebrations. Comments from PBOC governor Zhou Xiaochuan over the weekend went some way to calm markets, with the mood across Asia at the start of the week largely upbeat. In a sign that market sentiment was improving gold prices plummeted almost 2% overnight, adding to Friday’s modest losses as appetite for risk displayed a market improvement at the start of the week.
11 Feb 2016 08:40
Janet Yellen gave testimony to the House Financial Services Committee yesterday and as expected, played down the likelihood of another interest rate rise in March. The weaker dollar failed to offer much support to the base metals complex with zinc and tin the only two registering gains on the day. Front month Brent futures continue to trade under pressure this week but support around the $30-$30.50/bbl level continues to hold up well.
10 Feb 2016 08:36
LME three month copper prices had near term support kicked from underneath them yesterday as prices closed over 2% lower on the day, breaching near term support at the 50 day MA which we had anticipated to hold up well given Monday’s cautious session. The dollar index extended declines yesterday after some brief consolidation around the 200 day MA over the past few sessions, targeting a close just above 96.000. Gold prices look to have hit a ceiling with prices struggling to lift much higher yesterday, end the session around $1,190/oz with activity early this morning stabilising around these levels.
04 Feb 2016 08:27
Three month LME zinc prices rallied for the fifth straight session as a sharp sell-off in the dollar against a basket of major currencies as well as improving fundamentals in China buoyed demand for the metal. The Bank of England’s MPC are due to release their base rate decision later today which the majority of market participants expect to remain unchanged at 0.5%.
27 Jan 2016 08:31
Front month crude prices managed to recover the majority of Monday’s losses during yesterday’s trading session as investors viewed the sharp sell-off at the start of the week as overdone. Gold prices managed to hold onto yesterday’s gains as global growth concerns saw investors continue to pile into the safe haven asset. Chinese imports of copper rose to their highest level since December 2011 as customs data released yesterday saw the world’s second largest economy import just over 423K tonnes of the red metal.
01 Dec 2015 08:02
Chinese equity markets pushed tentatively higher overnight as encouraging economic news and data supported risk appetite across the region. The inclusion indicates just how extensive the reforms have been in China with offshore spot yuan trading 0.3% weaker against the USD as market participants anticipated that the PBOC would hold off from further stimulus, allowing a freer movement of the currency. After finally managing to close above 100.00 on Friday, the dollar index held firmly onto recent gains on Monday, trading tentatively higher towards 100.310 as investors geared up for this week’s economic data releases ahead of the FOMC meeting later this month.
30 Nov 2015 08:32
Iron ore prices slipped below $40/tonne on Monday after facing considerable headwinds last week. Three month LME copper prices look to be heading lower today as the red metal trades under pressure early on, failing to capitalise on last week’s late gains. The euro is set for its worst monthly performance since March as a growing number of economists expect the ECB to announce additional stimulus efforts at this week’s meeting.
27 Nov 2015 08:39
Gold prices are on track to close lower for the sixth straight week as an increasing number of investors expects the Fed to increase interest rates at next month’s FOMC meeting. Japanese economic data released late last night was less than impressive to say the least, prompting some modest weakness across Asian equity indices as the quiet optimism seen in Europe failed to spill over to the overnight session. Three month copper prices are finding it tough to hold onto yesterday’s gains early on this morning, with prices traded on the LME hovering around yesterday’s close, towards $4,620/tonne.
26 Nov 2015 08:20
Base metals prices rebounded firmly overnight as investors reacted warmly to the news that Chinese regulators were considering launching a probe into short selling on local exchanges. Yesterday’s Autumn Statement saw Chancellor George Osborne tackle the deficit from another angle after failing to curb welfare spending, instead introducing a 2% increase to council tax to help pay for social care while wielding the axe on departmental budgets. Front month Brent futures managed to post gains for a fourth successive session yesterday as intraday dips towards $45/bbl were firmly bought into and futures ended the session at $46.17/bbl after attempting to gain a foothold at $46.50/bbl.
24 Nov 2015 08:03
Three month LME nickel prices slumped to their lowest level since 2003 as prices extended declines for a sixth straight session. With the last OPEC meeting of the year looming, due to be held on December 4th in Vienna, investors are wondering what the members will make of the year where we have seen crude prices trade around multi-year lows and what the coming year will bring for the group. The dollar index flirted with 100.00 yesterday as intraday moves briefly touched this level before paring back slightly as investors maintained their positioning ahead of an expected US rates rise next month.
23 Nov 2015 08:06
Gold investors were hopeful that last week’s choppy trading potentially signalled that a floor was developing. San Francisco Fed President John Williams proffered strong hints on Friday, stating that there was a “strong case” for the Fed to increase rates in December. The commodity rout continues with industrial metals, oil and gas leading the way lower, largely driven by a stronger dollar and a growing fundamental imbalance. The stronger dollar, which has gained over 3.5% so far this month, and weaker demand outlook has seen the base metals complex take a battering as investors look to limit risk taking.
04 Nov 2015 08:45
Spot gold prices fell for fifth straight session yesterday, registering their biggest one day drop in almost two months as investors positioned themselves ahead of today’s ADP employment change and trade balance data. Chinese mainland stock indices rallied strongly overnight with the Shanghai Composite and CSI 300 both registering gains in excess of four percent as the government unveiled the details of its latest five year plan. ICE raw sugar futures extended gains towards 15.5 cents per pound yesterday as a combination of persistent rain in Brazil and increasing fuel costs in the world’s second largest producer increased the prospects of more cane crop being directed towards ethanol production.
30 Oct 2015 08:46
Treasury yields climbed higher on the US Fed’s hawkish outlook as increasing speculation of a December rates rise saw risk appetite for equities improve. While monetary policy in the US and the UK gears up for an eventual tightening, as expected the Bank of Japan held the annual rise in the monetary base at 80tn yen. The yen traded within a wide range against the dollar overnight, weakening towards 121.50 before swinging towards 120.30 towards the European open. Base metals prices as well as mining stocks came under renewed pressure yesterday as the Fed’s outlook for a potential December interest rate rise prompted a sell-off across a sector already beset by oversupply and lacklustre demand concerns.
23 Oct 2015 09:20
Front month crude futures continued to exhibit substantial downside pressure this week as data releases confirmed a bearish outlook for both Brent and WTI. Market participants were upbeat yesterday as ECB president Mario Draghi hinted at the prospect of more euro zone stimulus possibly before the end of the year. Three month LME aluminium prices sank to 2009 lows as the supply glut continues to pile downward pressure on the metal.
19 Oct 2015 08:51
China’s third quarter GDP managed to beat analyst expectations as data released overnight saw the economy expand at 6.9% y/y, slightly better than the 6.8% y/y expected. While growth in the Chinese economy continues to moderate investors owe thanks to policymakers in Beijing and the PBOC for improving liquidity conditions and their continued effort to bolster capital markets. In a sign that the overall mood is becoming more bullish for risk assets, spot gold prices were on track to close lower for the third straight session after breaching support at the 200 day MA during overnight trading.
12 Oct 2015 08:21
Copper, aluminium and zinc managed to hold onto Friday’s gains during early morning trading on Monday, finding firm support around the previous session’s close as upbeat investors reacted positively to the expectation of further output cuts. Further details regarding the Fed’s interest rate outlook were provided over the weekend as Vice Chairman Stanley Fischer signalled that there may be sufficient strength in the US economy to support an interest rates rise this year. Recent volatility reminds us of June 2013 where global asset prices exhibited significant “taper tantrum” as the Fed reined in its asset purchase programme
09 Oct 2015 08:32
Glencore has announced its decision to cut its annual zinc output by more than a third as the natural resources group struggles to navigate in a market dominated by weaker prices for industrial metals. Yesterday’s release of September’s FOMC meeting minutes saw policymakers vote overwhelmingly in favour of holding rates at the current record lows. Alcoa reported lower than expected earnings for the third quarter as a slowing Chinese economy and softer prices throughout much of the year saw EPS drop to 7 cents from 31 cents for Q3 2014.
01 Oct 2015 08:34
Asian equity markets managed to extend upward momentum during overnight trading, following Wall Street higher as investors seemed unfazed by pessimistic data. Compounding worries for the region China’s manufacturing activity shrunk for a second straight month as the index compiled by the China Federation of Logistics and Purchasing held below the 50.0 point mark despite a marginal improvement month-on-month to 49.8 from 49.7. Three month LME copper prices were encouraged higher by the stabilising Chinese PMI data and while it was far from bullish, early signs of the recent PBOC intervention having the desired effects saw the red metal rally above the 50 day MA during the early hours of the morning
29 Sep 2015 08:23
After a relatively stable September the rouble seems poised for a breakout as indicated by the technicals. Embattled commodities trader Glencore saw its shares hit a fresh record low yesterday, closing over 30% lower on the day as concerns regarding its burgeoning debt pile prompted investors to sell-off en masse. The Bank of England is expected to hold off from an interest rate increase at least until the mid-2016 according to the Centre for Economics and Business Research.
19 Aug 2015 08:09
Copper prices extended losses to fresh lows yesterday as the wider rout in commodities markets continued. UK inflation posted a surprise rise in July as headline CPI rose 0.1% y/y from zero the previous month. Gold prices built on support around yesterday close as activity overnight put the yellow metal on track to extend gains for a third straight session.
12 Aug 2015 08:07
The base metals complex saw intense selling pressure overnight as prices revisited levels last seen during the financial crisis. The yuan declined against the dollar for a second day, losing 1.94% from the previous close against the greenback as the government’s latest efforts to shore up markets struggled to have the desired impact. OPEC output hit a three year high in July sending front month Brent futures back below $50/bbl as the supply glut continued to build.
29 Jul 2015 08:46
Base metals indicated encouraging signs early on this morning after steady gains posted yesterday stemmed the recent rout in the metals market. It seems as if intervention from policymakers in China to utilise state funds in an effort to prop up the equity market is having the desired effect with mainland Chinese stock indices gaining just over one percent overnight. The ECB approved the reopening of the Athens Stock Exchange yesterday with further details on the exact timing and proposed trading restrictions still to be decided.
01 Jun 2015 08:04
China’s manufacturing PMI reading for May rose to 50.2, sending risk assets higher as investor confidence steadily improved. Three month LME copper, aluminium and nickel prices were supported higher early on this morning on the stable Chinese PMI data, as the industrial metals attempted to recover some of Friday’s steep losses. The deadline for a Greek deal is fast approaching and it seems hope is quickly fading as talks over the weekend failed to garner any significant traction.
21 May 2015 08:31
LME warehouse stockpiles of zinc shot up 7.8% yesterday alleviating some of the upward price pressure which has seen three month LME zinc prices rally over 20% since bottoming out at a year-to-date low of $1,981/tonne in mid-March, rising to a fresh year-to-date high just above $2,400/tonne earlier this month. Yesterday’s release of Aprils FOMC meeting minutes indicated that policymakers were increasingly expressing doubts regarding the strength of the US recovery as unimpressive economic data saw the prospects of an interest rates rise this summer diminish.
18 May 2015 08:02
Time is quickly running out for Greek officials as Greek banks run the risk of a shortfall of collateral with buffers dangerously low, threatening to derail any potential deal in the pipeline. Crude oil exports from Saudi Arabia to the US have fallen to their lowest level since the crisis as the impact of shale oil in the US and increasing presence of Canadian exports impacts the oil rich nation’s current account. Rio Tinto have announced a fresh attempt to sell-off surplus aluminium assets in a deal that could come with a $1bn price tag as it struggles to restructure itself and shed non-core assets in the face of a worldwide commodities slump.
13 May 2015 13:50
Three month LME zinc futures rallied for a second day, climbing back towards $2,375/tonne after adding almost 2% yesterday as prices continued to recover some of the previous week’s losses. The Bank of England cut its growth outlook for the UK in its quarterly inflation report, revising downwards its forecasts for economic growth over the next three years.
22 Apr 2015 15:29
A softer session for European equities as improved appetite for risk assets during Asian trading failed to carry over. Investor sentiment was dampened by the overhanging concerns regarding Greece’s debt crisis as officials on both sides struggle to make meaningful progress. Three month LME copper prices extended declines for a fourth straight session today as resistance at the 100 day MA continues to limit any significant upside potential.
21 Apr 2015 08:05
Three month LME copper prices shed almost 3% yesterday after a positive start to the week saw the red metal open at a four week high at $6,173/tonne. Asian indices headed higher overnight as they tracked a stronger session on Wall Street and continued to mull over the impact of further stimulus measures by the PBOC. The dollar index headed higher early this morning as the greenback built on support offered at yesterday’s close.