EUROPEAN COMMODITIES UPDATE: Commodities in the green in a continuation of the post-Fed/Powell trade

Analysis details (10:05)

• Crude benchmarks are in the green with XAU and base metals also firmer in a continuation of post-Fed/Powell price action.


• Specifically, WTI Dec’23 and Brent Jan’24 are posting gains of circa. USD 1.50/bbl on the session and reside around the USD 82.00/bbl and USD 86.00/bbl remarks. However, this remains well within Wednesday’s bounds and by extension some way shy of the USD 83.40/bbl and USD 87.00/bbl peaks for that session, highs which occurred around the US Quarterly Refunding announcement and extending on an existing bid for the space given remarks from Iran’s Khamenei. Thus far, Thursday’s session has been very light from a crude-specific perspective with only incremental updates on the geopolitical front alongside confirmation from China’s Foreign Ministry of Wednesday’s WSJ sources that China and the US will hold director-general level consultations on arms control and non-proliferation, delegation to be led by a senior official from the Foreign Ministry.


• Moving to metals, spot gold is benefitting from the aforementioned post-Powell trade as the USD and yields continue to slip. However, upside for the yellow metal is capped as the overall risk tone remains very constructive ahead of additional Tier 1 events including the BoE and numerous Central Bank speakers. Elsewhere, base metals are generally benefitting from that risk tone with specifics once again light but the action thusfar sufficient to bring LME Copper towards the USD 8.2k handle from its USD 8109 settlement. Separately, Dalian Iron Ore continues to rise with the January contract concluding Thursday’s session with gains of 1.5%. Upside which analysts have attributed to continued solid demand, low inventories and improved sentiment emanating from Chinese stimulus.

02 Nov 2023 - 09:54- Research Sheet- Source: Newsquawk