EUROPEAN COMMODITIES UPDATE: ICBM reports & Russian rhetoric cause gas to rise and havens to shine

WTI/Brent: +1.6%/+1.5%

• Benchmarks are firmer on the session, benefitting from the tense geopolitical backdrop as updates out of Russia continue to weigh on general risk sentiment. Benchmarks posting gains of just over USD 1/bbl on the session and in proximity to respective highs of USD 69.84/bbl and USD 73.87/bbl.


• This morning, the Kremlin remarked that Ukraine’s usage of storm shadow missiles marked a new escalation in the conflict; an update which seemingly sparked/added to a bout of risk off, with the opening of the US pre-market and pressure in NVIDIA also influencing.


• Prior to this, and again upping the ante, Ukraine’s airforce reported that Russia launched a ICBM this morning a RS-26 missile which is the first confirmed use of such weaponry during the conflict. However, the likes of CNN have since reported that the use of an ICBM by Russia has not yet been confirmed - an update which helped the broader macro risk tone.


• Furthermore, Russia said that the US missile base in Poland has long been a priority target which can be hit with “Russian new weapons”.


• Russia-Ukraine aside, the Middle-East remains in focus with Hochstein in the region though Israeli officials have reportedly said that it is unlikely an agreement with Lebanon will be announced during his visit, but there is optimism to one being reached within a week.

Dutch TTF: +1.8%

• Benefitting from the above with magnitudes more pronounced than in the crude space. At a fresh YTD high of EUR 48.15/MWh. The next point of resistance comes into play at EUR 49.81/MWh from early-December 2023.


• Note, the latest reporting that the use of an ICBM has not been confirmed has seen the gas benchmarks pullback modestly from best levels but remain notably firmer on the session.

Gold: +0.7%

• Firmer, benefitting from the tense geopolitical environment and the generally soft risk tone on this and after NVIDIA’s results. Action which has seen havens generally benefit across the board with the DXY, JPY and fixed income bid.


• Holding at a USD 2671/oz peak, aside from updates around the above, further direction may be derived from upcoming US data and a number of Fed officials thereafter.

3M LME Copper: -0.4%

• Dented in-fitting with the broader risk tone as discussed above. APAC action was a mostly subdued affair with base metals indecisive but in the red for much of the session.


• In European hours, as the risk tone has deteriorated further, the likes of 3M LME Copper have slipped further into the red down to a USD 9.05k trough and approaching the USD 9k handle.


• The current WTD base resides at USD 8.96k with last week’s trough at USD 8.87k below that.

21 Nov 2024 - 10:20- ForexGeopolitical- Source: Newsquawk