The base metals are for the most part opening firmer this morning after another quiet Asian session with China closed, the metals are up an average of 0.2 percent, led by a 0.8 percent rise in nickel, 0.4 percent gains in zinc and aluminium, copper is up 0.3 percent at $5,166, lead is up 0.2 percent, while tin is off 0.6 percent. Volume has been light with 2,077 lots traded.
Precious metals are mixed with gold and silver down an average 0.4 percent, while the PGMs are stronger with platinum up 1.4 percent and palladium up 0.9 percent.
Equities – the Euro Stoxx 50 closed up 0.6 percent and the Dow closed up 1.2 percent on Friday, recovering from an initial sell-off after the poor US employment report. This morning in Asia, the Nikkei is up 1.5 percent, the Hang Seng is up 1.3 percent, the ASX 200 is up two percent and the Kospi is up 0.4 percent. So the firmer stance in Asia, mayd help underpin a firmer tone in metals.
Currencies – the dollar weakened after the US employment report on Friday, the dollar index is last at 95.78, the euro is firmer at 1.1233, sterling is attempting a rebound, last at 1.5211, as is the aussie at 0.7071, while the yen is flat at 120.00, as is the rouble at 65.17. The rupiah, real, rupee and rand are all rebounding, again boosted by the poor employment report that makes it more likely that the Fed will stay on hold for longer.
The economic agenda is busy, Japan’s cash earning disappointing, they climbed 0.5 percent, later we get services PMI data out across Europe, EU Sentix investor confidence, retail sales, US ISM non-manufacturing index and labor market conditions – see table below for more details.
The metals had a knee-jerk reaction to the poor US data on Friday, but the secondary reaction was bullish with most of the metals closing on the highs of the day on Friday. There is some follow though buying today and judging by the strong equities this morning in Asia, it does look as though sentiment is bullish so we would expect the rebounds to continue for a while, especially as many of the metals have been quite oversold recently.
The precious metals rallied strongly on Friday as the US dollar dropped, this morning they are consolidating but looking strong. Palladium is leading on the upside with a run up to $709, up from a low of $521 from late-August. We wait to see if gold can climb above its down trend line, which is around $1,141 today.
|Average (BM ex-Steel)||0.2%||2,077|
|All Day||China||Bank Holiday|
|2:30am||Japan||Average Cash Earnings y/y||0.5%||0.7%||0.9%|
|8:15am||Spain||Spanish Services PMI||59.7||59.6|
|8:45am||Itally||Italian Services PMI||54.8||54.6|
|8:50am||France||French Final Services PMI||51.2||51.2|
|8:55am||Germany||German Final Services PMI||54.4||54.3|
|9:00am||EU||Final Services PMI||54||54|
|9:30am||EU||Sentix Investor Confidence||12.2||13.6|
|10:00am||EU||Retail Sales m/m||-0.1%||0.4%|
|Day 1||EU||Eurogroup Meetings|
|2:45pm||US||Final Services PMI||55.7||55.6|
|3:00pm||US||ISM Non-Manufacturing PMI||58||59|
|3:00pm||US||Labor Market Conditions Index m/m||2.1|