Base metal commodities and stocks have been in focus overnight. Copper and zinc have been rallying after Glencore announced significant cuts to its zinc production. Crude oil, meanwhile, continues to climb on speculation exploration cuts could lead to lower US production next year. Alcoa’s results came in below expectations and even though it forecasted weaker demand from China, Chinese markets ignored this and continued to advance. This confirms that the worst of the storm has passed in China and a recovery appears to be underway. European indices are trading higher today boosted by better than expected industrial production reports from France and Greece, who appears to be quickly bouncing back from its summer struggles. ECB President Draghi recognized the Eurozone economy is showing signs of resilience while giving his usual spiel about being ready to use all tools to support the economy without committing to actually using any more of them. USD is weakening again today as some traders have taken a dovish read to yesterday’s neutral FOMC minutes, enabling gold to rebound. It’s possible this could also be due more to flows back toward Europe with NOK, CHF and EUR among the top performers while the resource group has posted more moderate gains as they consolidate this week’s gains. GBP has been surprisingly soft despite Bank of England Governor Carney’s suggestion the Bank of England could raise rates before the Fed and has done so in the past, with also suggests we may be seeing cross channel capital flows. CAD had rallied early in the day but has been slipping back since the release of the latest Canada Labour Force Survey. Although the headline number beat the street, there was a big drop in full-time jobs masked by an increase in part-time jobs (most would prefer to see it the other way around), and an increase in the unemployment rate. This suggests Canada’s big rebalancing still has a long way and a bumpy ride to go. Still, the loonie remains above where it was a day ago so this may be seen as a minor setback if commodity prices continue to improve. Note Canadian mining stocks (both gold and base metal producers) could be active today on the price moves and big sector news. Corporate News Glencore plans to cut zinc production by 33% or 500K tonnes Alcoa $0.07 vs street $0.12, reduced China forecasts, maintained North America forecasts, Europe forecasts flat to slightly higher Economic News Significant announcements released overnight include: Canada employment change 12K vs street 10K Canada full-time jobs (62K) vs previous 55K Canada part-time jobs 74K vs previous (42K) Canada unemployment rate 7.1% vs street 7.0% France industrial production 1.6% vs street 0.2% Norway consumer prices 2.1% vs street 2.2% Italy industrial production 1.0% vs street 1.4% UK construction output 1.3% vs street 1.4% UK trade balance (£3.2B) vs street (£2.1B) Greece industrial production 4.5% vs street (2.8%) Greece consumer prices (0.8%) vs street (1.5%) Upcoming significant announcements include: 9:10 am EDT FOMC Lockhart speaking 1:00 pm EDT US Baker Hughes drill rig count previous 809 1:30 pm EDT FOMC Evans speaking CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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