Metals consolidate recent gains ahead of a day of data

• China’s Caixin Manufacturing PMI – Actual 50.1, Expected 50.1, Previous 50.0

Metals were diverse yesterday with nickel prices slipping 2.7 percent to $10,410, while lead continued its rally with a three percent rise to $2,065, zinc was up 0.9 percent, aluminium was up 0.5 percent, with tin 0.4 percent higher and copper was off 0.1 percent at $4,825. Precious metals were mixed yesterday with gold prices unchanged at $1,322, silver was off 0.5 percent, platinum was off 0.1 percent, but palladium remained firm, rising 0.8 percent to $715.

This morning, the base metals remain mixed, zinc and aluminium are off 0.4 percent, lead and copper are off 0.1 percent with copper at $4,821, nickel is up 0.3 percent at $10,445 and tin is up 0.2 percent at $20,030 – setting a fresh high for the year.

In Shanghai most of the metals are weaker this morning, the exception is lead that is up 1.9 percent and tin that is up slightly, but the rest are down between 0.1 percent for zinc and 1.9 percent for nickel, while copper is down 0.4 percent at Rmb 37,610. Spot copper in Changjiang is off 0.5 percent at Rmb 37,800-37,920, the spread has widened to an equivalent of $46 per tonne back and the LME/Shanghai copper arb ratio is at 7.80. The SHFE will be closed next week and will reopen on Monday October 10.

In other metals in China, iron ore prices in Dalian dropped three percent, which may well be profit-taking ahead of the week long holiday, steel rebar is off 2.3 percent, while gold and silver prices are off 0.1 percent.

Equities – the Euro Stoxx 50 closed little changed yesterday, but the Dow ended the day down 1.1 percent as some good data increased the likelihood of the Fed raising rates this year. Asia this morning is generally weaker, the Nikkei is down 1.4 percent, the Hang Seng is off 1.3 percent, the ASX 200 is down 0.4 percent, the Kospi is off one percent while the CSI 300 is up 0.4 percent. Profit-taking for quarter-end seems to be one of the dampeners, along with some weak Japanese data and concerns about Deutsche Bank.

In FX,  the dollar index is flat at 95.53, as are the euro at 1.1218, sterling at 1.2973, the yen at 101.15, while the aussie is slightly weaker at 0.7631. The yuan is last at 6.6697, the rupiah is weakening after recent strength and other emerging market currencies are on a back footing, although the rouble is looking firmer at 63.04.

The economic diary is busy today, Japan’s industrial production climbed 1.5 percent, which was better than expected, but there was a host of other data out that looked weak – see table below. China’s Caixin PMI came out slightly better than expected, it was originally scheduled to come out tomorrow – the official PMI data is still scheduled to come out tomorrow. Data out later includes: German retail sales, UK house prices, French CPI and consumer spending, Italian unemployment rate, UK GDP, current account, EU and Italian CPI, EU unemployment rate, with US data including personal spending, income and PCE prices, Chicago PMI and University of Michigan consumer sentiment and inflation expectations.

Lead and tin continue to push higher with lead seeming to be playing catch-up, copper, aluminium and zinc are consolidating recent gains and are pausing ahead of former resistance levels, while nickel has run into some selling ahead of its August peak. With China closed next week trading is likely to quieten down, although thinner trading conditions could increase price volatility. China’s official PMI, out tomorrow, may well set the next direction, we continue to favour the upside.

Gold prices got some lift on the stronger oil prices yesterday, but not much, prices are for the most part moving sideways and while they do so the risk of stale long liquidation remains. Silver is following gold’s lead, albeit in a more volatile manner, platinum is staying in low ground, while palladium is bucking the trend with prices looking set to challenge the July highs that were at $747.50, with the highest close then at $725. 

 

Overnight Performance
BST	06:01	+/-	+/- %	Lots
Cu	4821	-4	-0.1%	975
Al	1661.5	-7	-0.4%	875
Ni	10445	35	0.3%	832
Zn	2345.5	-9.5	-0.4%	812
Pb	2062	-3	-0.1%	339
Sn	20030	30	0.2%	9
	Average		-0.1%	3,842
Gold	1323.53	1.53	0.1%
Silver	19.105	-0.005	0.0%
Platinum	1029.2	4.2	0.4%
Palladium	718	3	0.4%
	Average PM		0.2%

 

SHFE Prices 06:01 BST	RMB	Change	% Change
Cu	37610	-140	-0.4%
AL	12460	-100	-0.8%
Zn	18170	-10	-0.1%
Pb	15245	285	1.9%
Ni	81070	-1560	-1.9%
Sn	128570	40	0.0%
Average change (base metals)	0		-0.2%
Rebar	2254	-52	-2.3%
Au	284.9	-0.3	-0.1%
Ag	4269	-3	-0.1%

 

Economic Agenda
BST	Country	Data	Actual	Expected	Previous
12:01am	UK	GfK Consumer Confidence	-1	-5	-7
12:30am	Japan	Household Spending y/y	-4.6%	-2.1%	-0.5%
12:30am	Japan	Tokyo Core CPI y/y	-0.5%	-0.4%	-0.4%
12:30am	Japan	National Core CPI y/y	-0.5%	-0.4%	-0.5%
12:30am	Japan	Unemployment Rate	3.1%	3.0%	3.0%
12:50am	Japan	BOJ Summary of Opinions
12:50am	Japan	Prelim Industrial Production m/m	1.5%	0.5%	-0.4%
1:00am	Japan	BOJ Gov Kuroda Speaks
2:45am	China	Caixin Manufacturing PMI	50.1	50.1	50
6:00am	Japan	BOJ Core CPI y/y	0.4%	0.6%	0.5%
6:00am	Japan	Housing Starts y/y	2.5%	7.3%	8.9%
7:00am	Germany	German Retail Sales m/m		-0.2%	1.7%
7:00am	UK	Nationwide HPI m/m		0.3%	0.6%
7:45am	France	French Consumer Spending m/m		0.4%	-0.2%
7:45am	France	French Prelim CPI m/m		-0.3%	0.3%
9:00am	Italy	Italian Monthly Unemployment Rate		11.4%	11.4%
9:30am	UK	Current Account		-30.5B	-32.6B
9:30am	UK	Final GDP q/q		0.6%	0.6%
9:30am	UK	Index of Services 3m/3m		0.3%	0.5%
9:30am	UK	Revised Business Investment q/q		0.5%	0.5%
10:00am	EU	CPI Flash Estimate y/y		0.4%	0.2%
10:00am	EU	Core CPI Flash Estimate y/y		0.9%	0.8%
10:00am	Italy	Italian Prelim CPI m/m		-0.3%	0.2%
10:00am	EU	Unemployment Rate		10.0%	10.1%
1:30pm	US	Core PCE Price Index m/m		0.2%	0.1%
1:30pm	US	Personal Spending m/m		0.2%	0.3%
1:30pm	US	Personal Income m/m		0.2%	0.4%
2:45pm	US	Chicago PMI		52.1	51.5
3:00pm	US	Revised UoM Consumer Sentiment		90.1	89.8
3:00pm	US	Revised UoM Inflation Expectations			2.3%

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