Daily metals

What's Moving Markets?Global equities made modest gains as mounting evidence of a weakening US labour market strengthened expectations of a Fed rate cut next week. Markets now assign roughly an 87% probability to such a move. The Challenger report showed layoffs rose to 71,321 in Nov, the highest for that month since 2022, bringing the year-to-date total to 1.17mn, the largest since 2020. Investors are also weighing reports that WH economic adviser Kevin Hassett could replace Fed Chair Powell in May, a move that may signal a shift toward more aggressive policy easing. Concerns of supply shortages bolstered copper and the industrial metals sector. Little progress in Russian peace talks saw oil prices gain. Precious metals were also higher amid rising expectations of a rate cut. Yields on 10-year US Treasuries rose by 4bp to 4.11%, while the USD index was steadier at 99.Precious metals were little changed ahead of the FOMC and digested fresh US labour signals that accelerated expectations of imminent easing. Markets now price roughly an 87% chance of a cut next week. Attention is turning to the delayed Sep PCE release due later today which should clarify the timing and pace of easing. Silver gave back some recent gains, proving price action remains volatile, however, with technically overbought conditions posing a near-term risk for bulls. Holdings by silver-backed exchange traded funds rose by about 200t on Tuesday, according to Bloomberg data, showing strong investor interest was continuing. That took total holdings to their highest level since 2022. Weaker-than-expected factory data from the US and China weighed on PGM prices.Base metals succumbed to profit-taking after a strong run up in recent sessions. However, concerns about shortages were compounded by ongoing mine disruptions and limited losses in copper. Ivanhoe Mines Ltd trimmed the outlook for production from its large Kamoa-Kakula complex in the Democratic Republic of Congo as it recovers from flooding earlier this year. Glencore Plc, which has seen a 40% drop in output since 2018, also cut its target for next year. The copper price still isn’t high enough to incentivise the cost of building the massive new capital intensive mega projects in the pipeline, said Blackrock’s Evy Hambro at a conference in London. Freeport-McMoRan would pursue an acquisition if "the stars and the moon" aligned but is not counting on deals to grow and is focused on developing existing assets, its CEO said. By the end of the decade, Freeport aims to be producing 800mnlbs (363kt) annually of copper outside of traditional mines with novel leaching technology in the US.Iron ore prices were capped by fresh supply growth. The first commercial shipment from the Simandou mine in Guinea is on its way to China, marking a shift in global supply. The mine is set to become one of the world’s biggest iron ore mines, with a ramp up schedule that will see it reach full capacity in only 2½ years.