EUROPEAN COMMODITIES UPDATE: Crude and base metals benefit from a softer Buck, but gold treads water pre-CPI

Analysis details (09:49)

WTI and Brent front-month futures are firmer intraday as a function of the receding Dollar in the run-up to the US inflation metrics, with participants wary of short-term upward moves as China continues with strings of lockdowns –the city of Sanhe near Beijing and Shijiazhuang city in Hebei also locking down a district. Elsewhere, geopolitical updates have also been busy overnight with the return of Armenian/Azeri tensions (Click here for Newsquawk analysis) – although at this point, given the myriad of themes around the markets, it is difficult to envisage an immediate impact on assets. Over in Europe, EU Commission President is to call another energy meeting by end-September, according to the Spanish Energy Minister. This comes after a draft proposal released yesterday suggested the EU is mulling mandatory power demand cuts in peak hours, alongside a levy on energy firms’ inflated profits, and a cap for power generators' revenues. This is hoped to be finalised before the end of this month. WTI Oct trades around USD 89/bbl (vs low around USD 86.60/bbl), while Brent Nov resides around 95/bbl (vs low 92.74/bbl). Elsewhere, spot gold is treading water with a mild downside bias despite the softer Dollar, - the yellow metal remains under its 50 and 21 DMAs at 1,740.82/oz and USD 1,731.05/oz respectively at the time of writing. Base metals are mostly firmer amid the weaker Buck and upside across stocks – 3M LME copper has reclaimed a USD 8,000/t handle. Elsewhere, China's Yunnan has reportedly ordered aluminium producers to cut usage by 10% between September 13th and 14th, according to sources cited by Reuters – the province accounts for 12% of the country’s production.

13 Sep 2022 - 09:52- Research Sheet- Source: Newsquawk