• Broader markets also mixed this morning, suggesting that markets are waiting for direction
Base metals
LME three-month base metals prices were down across the board this morning by an average of 0.6%, led by a 1.1% fall in copper ($9,385.50 per tonne). This followed average gains on Wednesday of 1.1%.

The most-active Shanghai Futures Exchange base metals contracts were mixed, with the August aluminium and July lead contracts both down by 0.6%, while the rest of the metals were up by an average of 0.8%, led by a 1.4% rise in August tin. August copper was up by 0.5% at 68,590 yuan ($10,583) per tonne.

Precious metals
Spot precious metals were also mixed, with gold down by 0.2% at $1,776.36 per oz and platinum down by 0.9% at $1,078.80 per oz, while silver ($25.88 per oz) and palladium ($2,619.70 per oz) were little changed.

Wider markets
The yield on US 10-year treasuries was 1.49% this morning, compared with 1.47% at a similar time on Wednesday.

Asia-Pacific equities were mixed on Thursday - the Nikkei was -0.07%, the CSI 300 -0.05%, the ASX 200 -0.51%, the Kospi +0.18% and the Hang Seng +0.11%.

Last week’s rebound in the US Dollar Index has ended and it was recently at 91.82, little changed from a similar time on Wednesday, having peaked at 92.41 on Friday.

Most of the major currencies were consolidating this morning: Sterling (1.3960), the Australian dollar (0.7573) and the euro (1.1925), while the Japanese yen (110.83) remains on a back footing.

Key data
Data already out on Thursday showed Japan’s services producer price index climb by 1.5% in May, after a 1.1% rise in April.

Later today, there will be data on Germany’s Ifo business climate and monetary policy updates from the Bank of England, with US data on gross domestic product, GDP prices, initial jobless claims, durable goods orders, wholesale inventories and natural gas storage.

In addition, there is a European Central Bank economic bulletin and US Federal Open Market Committee (FOMC) members Raphael Bostic and John Williams are scheduled to speak.

Today’s key themes and views
With the base metals consolidating after a rebound that only lasted three-days on the LME, the markets are likely to be nervous in case the rebound was just a dead-cat-bounce. With mixed messages coming from FOMC, the markets may well become more choppy while they look for direction. Given the gains seen over the past 15 months, or so, there may well be further room for consolidation at lower numbers.

The sell-off in gold has been sharp, but given the US Fed is not talking about raising rates until 2023 and bond yields have weakened again, then the reaction in gold seems a bit overdone - especially considering the mounting inflationary pressures and some evidence of rising US/China tensions.