EUROPEAN COMMODITIES UPDATE: Crude underpinned by risk appetite ahead of OPEC+, while gold bides time ahead of NFP

Analysis details (09:32)

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  WTI and Brent front-month futures are on a firmer footing as the complex holds onto yesterday’s data-driven upside with further tailwinds seen following dovish-leaning remarks from Fed officials. Prices are also buoyed by the broader risk appetite which reverberated through APAC markets before reaching Europe.


• Complex-specific newsflow has been light, but traders will be awaiting today’s US labour market report (full preview on the Newsquawk Research Suite) and thereafter the OPEC+ confab on Sunday - desks are seemingly in consensus that the group will keep production steady but will stress flexibility. Analysts are also in unison in assigning a non-zero chance of further production cuts, mainly given the Saudi Energy Minister's recent warning to speculators, and the fall in prices since the group's surprise, coordinated, voluntary curb announcement in April. Sources suggested OPEC+ is unlikely to deepen output cuts at the June 4th meeting, according to Reuters. (full preview on the Newsquawk Research Suite)


• Over to metals, spot gold is flat around the USD 1,975/oz mark after meeting resistance at its 21 DMA (1,983.77/oz) overnight, with the next DMA to the upside being the 50 DMA at 1,991.69/oz ahead of USD 2,000/oz. To the downside, the yellow metal sees the 10 DMA at USD 1,960.66/oz before yesterday’s trough at USD 1,953.15/oz. Base metals are firmer across the board, bolstered by the risk appetite coupled with stimulus hopes from China. 3M LME copper is back above USD 8,300/t from a USD 8,185/t intraday low, while Dalian iron ore rose overnight to a six-week peak. Recently, the Chinese Global Times suggested "Experts expect full-year GDP growth to exceed 6%", and added the PBoC may cut RRR by 0.25ppts "if the Chinese economy maintains a stable recovery in the second half of 2023 and requires more liquidity".

02 Jun 2023 - 09:34- MetalsData- Source: Newsquawk