EUROPEAN COMMODITIES UPDATE: USD exerts modest pressure while base metals edge higher on stimulus hopes

Analysis details (10:40)

• Another particularly quiet session for the commodity complex and to a large extent broader markets. Currently, the crude benchmarks are posting upside of circa. USD 0.20/bbl on the day and reside towards the upper-end of exceptionally narrow sub USD 1.00/bbl parameters. Price action which is well within the bounds of recent sessions, nonetheless the complex is set to see the week out with downside of just over USD 3.00/bbl, with the bulk of this occurring on Monday post-OPEC+.


• Crude specifics saw Commerzbank forecast oil at USD 90/bbl by end-2023, justifying the price target by their view that the market is set to tighten noticeably; a opinion shared by the likes of IEA’s Birol earlier this week.


• Elsewhere, on the geopolitical front there has been further pushback against reporting that a temporary deal is being constructed to replace the JCPOA while Russian and Chinese military leaders spoke and reaffirmed the high level of relations.


• Moving to metals, spot gold is essentially unchanged and has been gradually drifting off Thursday’s WTD best of USD 1970/oz, where the 21-DMA also resides, as the USD continues to firm up. Thus far, the yellow metal has tested but is yet to move below the USD 1958/oz 10-DMA; for reference, the 100-DMA resides below at USD 1940/oz and marks the WTD trough. Base metals are generally contained and are proving to be a touch more resilient vs their precious counterparts against the USD’s strength and are perhaps gleaning support from the increasing calls for officials Chinese support given recent economic performance, a view which has been emboldened further by May’s soft CPI.

09 Jun 2023 - 10:37- Research Sheet- Source: Newsquawk