EUROPEAN COMMODITIES UPDATE: Another Dollar driven session with participants conscious of numerous familiar factors

Analysis details (10:35)

• As it stands, the crude benchmarks are modestly firmer on the session despite initial downbeat performance in wake of readacross from US after-market earnings and on fresh COVID updates in China. Additionally, the significant build in headline Private Inventory data served as another bearish catalyst. The turnaround has been a function of pronounced USD pressure, with the index dropping incrementally below 110.00 at worst; for reference, there wasn’t a clear/overarching driver behind this move, with renewed GBP upside seemingly the initial catalyst. WTI and Brent Dec’22 contracts reside at the top-end of USD 1.50/bbl parameters though remain capped by USD 86/bbl and USD 94/bbl respectively at the time of writing.


• Away from crude, gas prices draw focus and are generally modestly firmer on the session after pronounced action yesterday that saw some of the shorter-term TTF contracts move into negative territory; ING writes that this was seemingly driven by storage levels approaching capacity and the current comparatively mild weather across the continent. Currently, TTF Nov’22 is bid by over 1% and remains just above the EUR 100/MWh level vs Tuesday’s test of the 90 handle.


• Moving to metals, where the story is once again and as outlined above very much USD driven. As such, the yellow metal is firmer by USD 20/oz on the day and thus has eclipsed both the 10- & 21-DMAs at USD 1649/oz and USD 1667/oz respectively. More broadly, base metals are gleaning similar upside that has, for instance, enabled LME Copper to climb further above USD 7.5k and aluminium to extend on Tuesday’s relative outperformance amid Norsk Hydro’s domestic production shutdown.

26 Oct 2022 - 10:35- MetalsResearch Sheet- Source: Newsquawk