EUROPEAN COMMODITIES UPDATE: Once again, dictated by broader price action and pressured by the USD

Analysis details (10:30)

• The complex looks set to end the week with another session of relatively limited explicit newsflow and as such participants focus remains on broader macro developments and pricing, with US PCE Price Index the highlight. Currently, the benchmarks are pressured by around 1% or just shy of USD 1.00/bbl on the session though are still set to end the week with upside of just over UD 2.00/bbl, at the time of writing. Back to today’s action where WTI and Brent bounced firmly from overnight lows, though remained negative overall, in the European morning with no clear fundamental factor sparking this and broader action relatively contained at the time. However, this proved very shortlived and the benchmarks have since slipped back down to around USD 88/bbl and USD 96/bbl respectively as the broader risk tone remains subdued and the DXY advances to 111.00+ at best.


• Moving to metals, the complex is once again under USD-induced pressure with precious metals unable to derive any substantial allure from their traditional haven status. Overall, spot gold is set to end the week with losses of around USD 20/oz and is currently pivoting its 10-DMA at USD 1649/oz after failing to eclipse the 21-DMA at USD 1667/oz overnight. Given the USD’s strength and the pressure seen in APAC trade, particularly within China, base metals are hampered with LME Copper moving back towards the USD 7.5k mark vs its prior close at USD 7.76k.

28 Oct 2022 - 10:30- Research Sheet- Source: Newsquawk