EUROPEAN COMMODITIES UPDATE: Crude gives up overnight gains but metals cheer the softer Dollar.

Analysis details (09:35)

WTI Dec and Brent Jan futures have been giving up their overnight gains with the former back around USD 88.50/bbl (vs high 89.76/bbl) whilst the latter trades around USD 94.50/bbl (vs high 95.96/bbl). Overnight, the complex was supported by the softer Dollar and the continued gains across the Chinese markets, with some pointing to second winds from the recent rumour-driven surge regarding China reopening despite the denial by a Foreign Ministry spokesperson. Furthermore, the large surprise crude drawdown in the API data underpinned the complex in APAC hours. Since then and heading into the European open, downticks were seen in prices in a move that coincided with shipping-giant Maersk cutting its FY22 global container demand forecast whilst noting that a slowdown in the global economy will lead to a softer market in the ocean. The downside was exacerbated as the EZ manufacturing PMIs were revised lower across the board, with the commentary flagging further recessionary concerns coming to fruition – “The eurozone goods-producing sector moved into a deeper decline at the start of the fourth quarter. The PMI surveys are now clearly signalling that the manufacturing economy is in a recession. In October, new orders fell at a rate we’ve rarely seen during 25 years of data collection...", the EZ release stated. Ahead, ADIPEC day 3 has commenced with eyes on pertinent commentary, whilst overall market sentiment will likely dictate price action heading into the FOMC later today. Over to metals, spot gold is mostly firmer as the Dollar loses some ground, with the yellow metal modestly above the USD 1,650/oz level and sandwiched in between its 10 and 21 DMAs at 1,648.89/oz and 1,659.70/oz respectively. Similarly, metals on the LME are firmer amid Dollar action, with 3M copper briefly topping USD 7,700/t after gaining on the aforementioned Chinese COVID optimism overnight.

02 Nov 2022 - 09:35- MetalsData- Source: Newsquawk