• US Federal Reserve chair Jerome Powel warned too little stimulus is worse than too much.
  • International Monetary Fund chief Kristalina Georgieva warns economic “calamity is far from over”.
  • US President Donald Trump postpones stimulus talks with Democrats until after the US presidential election.

Base metals
Three-month base metals prices on the LME were down by an average of 0.5% this morning, led by a 0.9% fall in copper that was recently quoted at $6,480.50 per tonne, while aluminium that was down by 0.3% at $1,764.50 per tonne was down by the least.

With China still on holiday, volumes traded on the LME at 2,091 lots as of 5.43am London time were slightly more than on Monday and Tuesday, when they averaged 969 lots at a similar time.

Precious metals
After Tuesday’s heavy down day that saw the precious metals complex close down by an average of 3.3%, with gold falling 1.9%, the precious metals were firmer by an average of 1% this morning; spot gold was up by 0.5% at $1,884.59 per oz, while silver, platinum and palladium were up by 1.6%, 1.5% and 0.5% and were recently quoted at $23.47 per oz, $862 per oz and $2,359 per oz respectively.

Wider markets
The yield on US 10-year treasuries has consolidated around recent highs and was recently quoted at 0.75%, this compared with 0.77% at a similar time on Tuesday.

The Asian-Pacific equities were mixed: the ASX 200 (+1.25%), Nikkei (-0.18%), Hang Seng (+0.55%) and the Kospi ($+0.74%).

The US dollar index was consolidating this morning with a slight upward bias. It was recently quoted at 93.80, after 93.41 at a similar on Tuesday and a recent 91.73-94.75 range.

Most of the other major currencies have turned lower while they also consolidate: the euro (1.1737), the Australian dollar (0.7127), sterling (1.2901) and the yen (105.73).

Key data
Economic data already out on Wednesday showed Japan’s leading indicators had climbed to 88.8% in August, from 86.7% in July.

Later there is data on German industrial production, French trade balance, UK house prices, Italian retail sales along with US data on crude oil inventories and consumer credit.

In addition, European Central Bank President Christine Lagarde and Federal Open Market Committee (FOMC) members Neel Kashkari and John Williams are scheduled to speak. The FOMC will also release the minutes from its September meeting.

Today’s key themes and views
The recent rebounds in the base metals have for the most part once again run out of steam, the exception is tin where prices are holding up in high ground. We look for more direction to emerge once China returns from its Golden Week holiday. With Trump putting on hold stimulus talks until after the US presidential election, markets may well tread water for longer.

The pullback in gold prices on Tuesday, suggests the yellow metal is still consolidating its March-August rally. And while it does so, the path of least resistance looks to be to the downside. Nearer the US presidential election, we would expect gold to pick up more haven demand.