EUROPEAN COMMODITIES UPDATE: Commodities are lifted by a faltering Dollar, whilst copper feels an additional boost from Escondida

Analysis details (10:05)

WTI and Brent front-month futures have been climbing since the start of the APAC session as a function of the declining Dollar and overall risk appetite in the market. The former resides around USD 84.50/bbl (vs low 82.71/bbl) and the latter just under USD 90.50/bbl (vs low 88.60/bbl). The focus for energy markets today will be the EU energy ministers’ meeting, whereby a series of proposals will be discussed and examined, with a presser due later in the day. Proposals include 1) A mandatory target for reducing electricity use at peak hours. 2) A cap on revenues of companies producing electricity with low costs and re-channel unexpected profits to support vulnerable people and companies – a windfall levy. 3) A “solidarity contribution” for fossil fuel companies. 4) Liquidity Support for energy utility companies, an update to the temporary framework to enable state guarantees to be delivered rapidly. 5) A cap on Russian gas – which will likely not pass given the large divide between member states (full Newsquawk primer available here). Over to metals markets, base metals have been bolstered by the softer Chinese inflation metrics – which also lowers the chances of further state intervention, whilst copper leads the charge with tailwinds from the Escondida mine shut – 3M LME copper re-tested USD 8,000/t to the upside. Finally spot gold is firmer as the DXY losses further ground, with the yellow metal topping yesterday’s high as it eyes its 50 DMA at USD 1,744.12/oz.     

09 Sep 2022 - 10:05- Research Sheet- Source: Newsquawk