EUROPEAN COMMODITIES UPDATE: Commodities off lows in tandem alongside sentiment, but a firmer Dollar caps prices

Analysis details (09:54)

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  WTI and Brent June futures are choppy after initial losses were trimmed shortly after the cash open, with sentiment somewhat supported as French, German, and the wider EZ composite PMIs topped forecasts, although manufacturing misses across the board. UK PMIs followed a similar theme to the EZ release, whilst suggesting "This combination of faster growth and elevated price pressures put a twelfth rate hike by the Bank of England and increasingly done deal when it next meets on 11th May and will add to speculation that further hikes may be needed.” Aside from the PMIs, crude-specific newsflow has been on the lighter side, with price action largely dictated by sentiment and the Dollar. WTI trades on either side of USD 77.50/bbl while its Brent counterpart oscillates on either side of USD 81.00/bbl – both in relatively tight ranges. Elsewhere, nat gas futures are mixed, with US Henry Hub under pressure and Dutch TTF slightly firmer, but both within recent ranges.


• Over to metals, spot gold was pushed back under USD 2,000/oz from a USD 2,005.62/oz overnight high as the DXY picked up – with the next level to the downside being Wednesday’s trough at USD 1,969.30/oz. Meanwhile, base metal prices in Western exchanges are mostly lower but off worst levels as the risk tone somewhat improved from earlier, whilst iron ore prices in China and Singapore slumped by around 5 and around 7% respectively amid China’s continued crackdown in the sector. Elsewhere, some Japanese aluminium buyers reportedly agreed on April-June premiums of +45-53% vs the prior quarter, according to Reuters sources. Finally, production numbers from BHP and Glencore showed iron ore and copper ore production falling Y/Y, whilst nickel output for Glencore fell but BHP saw an uptick. Both mining giants maintained their production guidance.

21 Apr 2023 - 09:58- MetalsEU Research- Source: Newsquawk