• Japan’s manufacturing purchasing managers’ index (PMI) climbed to 47.7 in September from 47.2 in August
  • Japan’s Tankan indices improved month on month but were weaker than expected

Base metals
Three-month base metals prices on the LME were for the most part firmer this morning; the exceptions were lead and tin, with the former down by 0.1% at $1,826 per tonne and the latter untraded. The rest were up by an average of 0.2%, led by a 0.4% rise in nickel ($14,525 per tonne) with copper up by 0.1% at $6,694.50 per tonne.

Volumes traded on the LME were not surprisingly low with 1,554 lots traded by 5.37am London time, compared with an average of 6,838 lots traded at a similar time across last week.

Precious metals
The precious metals were firmer this morning, up by an average of 1%, although spot gold prices lagged behind the others with gains of just 0.3% to $1,893.82 per oz. Spot silver was up 1.1% at $23.63 per oz, platinum was up by 1.6% at $905.50 per oz and palladium was up by 0.9% at $2,329 per oz.

Wider markets
The yield on US 10-year treasuries has moved higher, it was recently quoted at 0.7%, this compared with 0.65% at a similar time on Wednesday.

Most of the Asian-Pacific equities we follow were for the most part closed for one reason or another, the exception was the ASX 200 (+1.17%).

The US dollar index’s rebound has stalled this week and has started to weaken; it was recently quoted at 93.70, this after 93.94 at a similar time on Wednesday. The recent range being 92.74 to 94.75.

The other major currencies were firmer this morning: the euro (1.1744), the Australian dollar (0.7178), sterling (1.2937) and the yen (105.48).

Key data
Thursday is a busy day for economic data releases - key data includes manufacturing PMI out across Europe and the United States, European Union producer prices (PPI) and EU unemployment.

US data includes Challenger job cuts, personal spending and income, personal consumption expenditures consumer price index, initial jobless claims, construction spending and total vehicle sales.

In addition, there are numerous central bankers scheduled to speak including UK Monetary Policy Committee member Andrew Haldane and Federal Open Market Committee members John Williams and Michelle Bowman.

Today’s key themes and views
The upward trends in the base metals on the LME have stalled with most of the metals’ trends drifting lower but pockets of buying are providing some of the metals with support. This is most notable today in copper and nickel.

Overall, we would not be surprised to see weakness continue for a time while the markets consolidate as the near term outlook looks more muddled than it has for a while with the pandemic accelerating again in Europe, delays to additional stimulus being seen and increased uncertainty over the US presidential election. But we do expect good buying interest to return before too long once actual demand from infrastructure projects gathers pace and planning stages move toward construction.

Gold prices have got some lift off last week’s low, but are consolidating below $1,900 per oz for now. Prices are in a two-month old downward trend so it is too early to tell whether a base has been found yet. But given there is still so much uncertainty on the economic, political and pandemic fronts, we do not think the overall uptrend has finished yet.