EUROPEAN COMMODITIES UPDATE: China’s activity data tarnishes metals though crude remains afloat

Analysis details (10:45)

• Commodities are generally in familiar ranges in what has been relatively quiet trade post-FOMC and pre-ECB. Though, this comes with the exception of base/industrial metals which are dented after China’s disappointing activity data whereby both industrial production and retail sales missed expectations. Within the industrial report, the mining sector exhibited particular strain at -1.2% YY following on from a flat reading in April. Data which is in-fitting with the recent slew of soft figures from China as the region’s reopening stalls and has prompted action from officials to bolster the demand situation in recent sessions; further to that, the PBoC cut the one-year MLF rate by 10bp to 2.65%.


• Specifically, the likes of 3-month LME Copper trades lower by around 0.5% and has slipped back under USD 8.5k, with slightly larger losses seen in Aluminium, Palladium and Platinum thus far.


• Elsewhere, spot gold is unable to glean any support from the modest equity pressure that has crept in throughout the European morning. Though, similarly, it hasn’t been tarnished too much by the stronger USD given the DXY has waned from initial best and is reapproaching the 103.00 mark. Currently, the yellow metal is holding just off the USD 1930/oz session trough.


• Crossing to crude, the benchmarks are modestly firmer despite the generally softer tone and pressure on the aforementioned Chinese data, with the modest upside perhaps a function of ongoing and expectations for further official support from the world’s largest oil importer. WTI and Brent reside firmly in familiar ranges with fresh specific fundamental drivers slim thus far and the docket ahead focused firmly on the ECB which itself is intersected by US data.

15 Jun 2023 - 10:39- MetalsData- Source: Newsquawk