EUROPEAN COMMODITIES UPDATE: Modest gains with participants awaiting Tier 1 data and Hezbollah's Nasrallah

Analysis details (09:25)

• Crude benchmarks are modestly firmer on the session, in-fitting with the cautiously upbeat risk tone going into US NFP. Spot gold is firmer but closer to the unchanged mark and the tone serves as a headwind but ongoing USD softness provides some support. Base metals are performing better, with LME Copper benefitting from the tone and particularly the strong APAC session despite Chinese data.


• The session's main event, data aside, is likely the speech from Hezbollah's Nasrallah. Remarks which will be the leaders first comments since the beginning of the Hamas-Israel war, remarks are scheduled for around 15:00 local time or 13:00GMT. From the speech we will be looking for any indication as to whether Hezbollah is set to commit itself more fully to the conflict and take a more prominent position against Israel as thus far their involvement has mainly been around the frontier and utilising a limited amount of their military force; on this, unconfirmed and uncorroborated Telegram reporting has suggested that if a ceasefire was not agreed by the time of the speech then they would be prepared to declare war against Israel. A further consideration is what Hezbollah's stance means for Iran, as Nasrallah has a prominent role within the "Axis of Resistance" which is a anti-Israel/Western coalition formed and led by Iran who, thus far, have had a relatively limited role in the conflict. In terms of any ceasefire, talks of one have become more prominent in the last 24-hours with US VP Harris saying they are seriously considering a humanitarian ceasefire within Gaza. Further to this, an Israeli official added that PM Netanyahu is said to be considering the request and could agree to a halt for a few hours, which would allow for hospitals within Gaza to receive fuel. Finally, it is worth reminding that US Secretary of State Blinken landed in Israel earlier in the session.


• As it stands, WTI Dec’23 and Brent Jan’23 are holding onto modest gains but have come under pressure throughout the morning ahead of the session’s key events and with newsflow otherwise relatively sparse. Currently, the benchmarks are pivoting USD 82.75/bbl and USD 87.00/bbl respectively.


• For metals, spot gold as mentioned is a touch former but yet to breach the USD 1990/oz mark and by extension test recent peaks towards and above the USD 2000/oz handle. Elsewhere, base metals have managed to hang onto gains from the APAC session despite the modest easing from best levels that has taken place throughout the European morning. Again, fresh fundamentals have been light with attention firmly on US data and geopols.

03 Nov 2023 - 09:20- Research Sheet- Source: Newsquawk