EUROPEAN COMMODITIES UPDATE: Commodities cave amid the USD’s relative resurgence and further COVID controls
Analysis details (10:45)
- Crude benchmarks have been slipping throughout the European morning as initial upside on the USD’s pullback dissipated with the DXY now back above 107.00. A such, WTI Dec’22 and Brent Jan’23 are at session lows of USD 87.74/bbl (high 89.84) and USD 94.90/bbl (high 96.95) respectively.
- USD aside, the complex has been weighed on by the strengthening of COVID prevention and control measures within Beijing following the city reporting the highest number of local cases in a year over the weekend. More recently, participants have shifted their focus to the ongoing Biden-Xi meeting with initial remarks encouraging, e.g. Chinese President Xi saying he looks forwards to working with Biden and bringing the relationship back on track; albeit, the remarks are devoid of any firm details. As it stands, it is unclear if there will be a statement and/or press conference when the meeting concludes. For crude explicitly, the session ahead features the OPEC MOMR at 12:10GMT/07:10ET.
- Moving to metals, both precious and base metals have succumbed to the USD’s relative resurgence with additional headwinds from the mentioned COVID controls. Specifically, spot gold has slipped back towards the USD 1750/oz mark; below this, Friday’s USD 1746/oz trough looms before the 100-DMA at USD 1713/oz. As such, base metals have continued to pullback from strong APAC trade, initial upside that was spurred by source reporting around the Chinese property sector.
14 Nov 2022 - 10:43- Research Sheet- Source: Newsquawk
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