• Chairman Jerome Powell says the United States Federal Reserve could “easily move ahead” with its decision about when to taper
  • Evergrande shares bounced after the company’s chairman reassured investors
Base metals
Three-month base metals prices on the London Metal Exchange were mixed this morning, with copper ($9,233 per tonne) and tin (34,900 per tonne ) down by 0.7% and 0.4% respectively, while the rest of the complex was up by an average of 0.4% - led by a 0.9% rise in lead ($2,140 per tonne) after the heavy metal had lagged behind in Wednesday’s broader rebound.

The most-active base metals contracts on the Shanghai Futures Exchange were mainly firmer, the exception of October zinc, which was down by 0.3%. The rest were up by an average of 1.1%, led by gains of 2.3% in tin and 2.1% in aluminium. These two metals remain the most bullish as they are affected by supply disruptions.

Precious metals
Spot gold and silver prices were down by 0.2% at $1,764.99 per oz and $22.65 per oz respectively, while the platinum group metals were up either side of 0.7%.

Wider markets
The yield on US 10-year treasuries was little changed and was recently at 1.32%, after 1.33% on Wednesday - and, given the more hawkish stance by the Fed, it is surprising the yield was not firmer.

Asia-Pacific equities were mainly firmer on Thursday morning: the Nikkei was closed, while the Hang Seng (+0.73%), the CSI 300 (+0.45%) and the ASX 200 (+1%) were all up, but the Kospi (-0.53%) was lower, although it had been closed in recent days.

Currencies
The US Dollar Index was consolidating on Thursday morning and was recently at 93.30, this compared with 93.28 at a similar time on Wednesday.

Most of the other major currencies were also consolidating: sterling (1.3644), the euro (1.1716) and the Australian dollar (0.7245), but the Japanese yen (109.54) was weaker.

Key data
Thursday’s economic agenda is busy mainly with the release of flash purchasing managers index (PMI) data out across Europe and the US.

In addition, there is an European Central Bank economic bulletin, EU data on consumer confidence, a Bank of England monetary policy update and US data on initial jobless claims, leading indicators and natural gas storage.

Thursday’s key themes and views
The metals continue to recover from recent weakness and if the Evergrande crisis has been kicked down the road that is one less concern for the markets. Nickel and lead have been the two metals that suffered the most in the recent correction, but they are now recovering. Overall, we continue to see the path of least resistance remaining sideways-to-up.

Gold prices have been in a choppy sideways range since June, but the overall longer-term trend remains downward. With central banks more likely to tighten monetary policy in the months and quarters ahead, the opportunity cost of holding gold is likely to creep higher, which is likely to keep overhead pressure on gold.