EUROPEAN COMMODITIES UPDATE: Commodities curtailed in relatively limited newsflow ahead of Biden’s announcement
Analysis details (10:50)
Crude benchmarks have conformed to and are seemingly leading the broad risk-off price action; currently, benchmarks are lower by over 4.00% on the session. Commodity pressure began in the APAC session despite a lack of fresh pertinent catalysts at the time and has continued throughout the European morning, again, with catalysts limited and focused on known themes. For the session ahead, and a focus point for the morning, is the upcoming announcement from US President Biden on the energy situation where he is to call on Congress to implement a temporary suspension to the federal fuel tax, to combat record prices. An update that is expected around 19:00BST/14:00ET. Note, that while this measure will (assuming it is passed on) reduce pump prices for the consumer, it is also seen as being likely to drive demand for an undersupplied commodity – which will, in time, push prices higher and have knock-on implications for inflation. It’s worth pointing out that within the earlier update, the White House made clear that they do now believe this measure alone will alleviate elevated prices; as such, participants will be attentive for any allusion towards further measures. Currently, the benchmarks are posting losses in excess of USD 5.00/bbl with Brent now back to its lowest level since mid-May, when it dipped to USD 105.70/bbl. Elsewhere, spot gold is softer in-line with the broader commodity action though the magnitude is much less pronounced as its safe-haven status cushions it somewhat. LME Copper slips, again on the broader tone, and backs away from the USD 9k mark it was in proximity to earlier in the week ahead of strike action in Chile that is seemingly still set to begin today.
22 Jun 2022 - 10:50- MetalsResearch Sheet- Source: Newsquawk
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