Analysts at ANZ note that commodities started the week on a positive note as with US exchanges closed, political developments in Europe drove sentiment in commodity markets.
Key Quotes
“Crude oil prices nudged higher as investors continued the tug of war between supply around the world. With the US market closed for President’s Day, liquidity was significantly lower than normal in the oil market. Despite prices stuck in a tight trading range, CFTC data showed investors raised their net long positions in WTI and Brent to a record high level.”
“A solid session in Asia flowed into trading in Europe, with most base metals ending the day higher. Lead and zinc lead the gains, with rising concerns over concentrate supplies. Vedanta CEO Tom Albanese said smelters are struggling to find source material after last year’s mine closures. Copper prices were also higher, supported by the ongoing stalemates at both Escondida and Grasberg.”
“Iron ore prices rose strongly as further steel capacity reductions saw steel prices surge higher. Bloomberg reported that China’s Hebei had ordered steel mill in Tianjin to cut production ahead of the national annual parliament meeting to improve air quality. This follows on from news late last week that China will continue to encourage steel producers to sign long term contracts with raw material suppliers to help eliminate outdated capacity.”
“Gold prices reversed last Friday’s losses amid low liquidity. Without any major economic releases or signals from the currency markets, gold is likely to trade sideways. However, all eyes will be on the release of minutes from the Fed’s last meeting for any evidence that Trump’s policies are having an impact on their rate policy.”
“With US markets closed, Agriculture prices were unchanged.”
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