EUROPEAN COMMODITIES UPDATE: PMIs push crude around, XAU bid, base metals soft

WTI/Brent: +0.3%/+0.4%

• Modestly firmer on the session, though the benchmarks came under pressure on the growth/demand implications of the EZ and UK Flash PMIs and as the USD picked up. However, as the PMIs passed and with the docket ahead somewhat light into the US release benchmarks have managed to lift off lows.
• Currently at USD 70.20/bbl and USD 74.45/bbl respectively, in the green but at the lower-end of circa. USD 0.80/bbl parameters.
• Overnight, focus very much on geopols with Ukraine describing the latest Russian missile action as a major escalation though Russia themselves have downplayed the implications of it and the US says they were warned ahead of Thursday’s ICBM launch and also somewhat downplayed the implications of it.
• Most recently, reports indicate that Ukrainian politicians have been told to avoid parliamentary areas within Kyiv - specifics around this are light.
• Elsewhere, in the Middle-East, US Envoy Hochstein left Israel and did not announce the outcome of talks. As a reminder, the base case was that no agreement would be reached while Hochstein was there though the outlook over the next week is seen as more favourable - though, this may have been complicated/tempered somewhat by Israel announcing that France cannot be involved in any Lebanon deal.

Gold: +1.3%

• In the green, benefiting from the ongoing tense geopolitical backdrop and lifting with fixed income on the dismal PMIs out of the EZ and UK.
• As it stands, the yellow metal is just off a USD 2707/oz best, well above Thursday's USD 2673/oz high and at a new peak for the week.
• Ahead, the yellow metal will await further direction from the US PMIs and the USD, with marked upside in the DXY perhaps serving to cap further gains for the yellow metal thus far. That aside, any fresh geopolitical update and/or unscheduled Fed speak could spur further direction before Bowman after hours.

3M LME Copper -0.4%

• Base metals began the European session on a modestly weaker footing, with demand overnight sapped by the negative mood in China overnight. Thereafter, base metals took another leg lower in tandem with the souring risk tone spurred on by the abysmal PMI metrics from France, Germany and the EZ. HG copper currently trades towards the bottom end of a USD 4.0710-4.1195 range.