COMMODITIES: Oil Consolidates, Gold & Metals Higher
Oil benchmarks sit a touch off recent highs, although more so for Brent than WTI. Brent was last around $80.75/bbl, off around 0.30% for the session so far. WTI was close to $78.70/bbl. Both benchmarks remain within striking distance of recent highs, which came post fresh US sanctions on Russia at the end of last week. Elsewhere, gold continues to trade with a positive bias, up nearly 0.30%. Metals are mostly positive as well, with copper and iron ore up.
- For WTI, upside focus is on $79.59, the Jul 5 ‘24 high, followed by $80.14, the Apr 12 ’24 high and a key medium-term resistance. Tanker rates have reportedly risen in response to US actions, while other measures of supply, like prompt spreads are also giving bullish signals for oil.
- Gold maintains its support on dips backdrop, last near $2670, up modestly in Tuesday trade to date. Recent resistance around $2700 remains intact. The softer USD backdrop is lending support to hold today, although better equity trends is likely aiding risk appetite (which can be a gold headwind).
- Copper has been aided by USD softness and the earlier reports of a gradual ramp up in tariffs by the returning Trump administration. CMX coper was last up 0.80% near $436.
- Iron ore has recaptured the $100/ton handle. A better China equity backdrop, amid multiple supports, is a positive, while since Q4 last year, Iron ore has been supported sub $100/ton. Yesterday's bumper iron ore import number for China for Dec is another positive.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
