EUROPEAN COMMODITIES UPDATE: Commodities adopt a downward bias after a mixed APAC session ahead of inflation data

Analysis details (09:51)

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  WTI May and Brent June futures trade subdued amid the cautious risk sentiment after both contracts settled higher by USD 1.40/bbl and USD 1.01/bbl respectively yesterday, with desks citing ongoing Iraq/Kurdistan production woes in a lack of fresh catalysts, whilst strike action in France also contributed to a narrowing in the WTI/Brent arb – which moved from some USD 6/bbl to USD 4/bbl during March. Overnight, prices largely traded sideways before waning during early European hours as the risk tone was sullied by firmer-than-expected French CPI data ahead of the EZ-wide metric later and US PCE – known as the Fed’s preferred inflation gauge. Elsewhere, geopolitical tensions are brewing in the background with some punchy rhetoric from Putin ally and Belarusian president Lukashenko, who warns that the West seeks to invade his country with the aim of "destroying" it, and added the war “is not far from us and there are attempts to drag us into it.” This commentary follows the weekend reports that Russia is looking to move tactical nuclear weapons into Belarussian soil. Ahead, the JMMC is poised to convene on Monday to discuss oil market fundamentals, although this is largely expected to be a non-event as things stand. Elsewhere, nat gas futures are firmer on both sides of the pond, with Dutch TTF futures back above EUR 45.00/Mwh for the May, June, and July contracts, whilst US Henry Hub resides around recent levels near USD 2.12/MMBtu.


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  Metals hold a downward bias in European trade thus far amid the fragile risk tone and as the dollar attempts to claw back some lost ground as yields rise. Spot gold has dipped back under USD 1,975/oz from a USD 1,985/oz APAC high, but prices remain caged ahead of EZ CPI and US PCE. Base metals are mostly softer with little sustained action seen after the above-forecast Chinese NBS PMIs, with 3M LME copper near USD 8,900/t after slipping from a USD 9,050/oz intraday high

31 Mar 2023 - 09:53- Research Sheet- Source: Newsquawk