Daily Metals

THIS MORNING Base metals are mixed at the start of Monday, with four of the six contracts above Friday’s official close. Aluminium leads the gains, up 0.5% at $3,099 a tonne, while tin and copper are each 0.3% higher at $54,150 and $14,296. Lead has added 0.1% to $1,815, whereas nickel is down 0.1% at $15,425. Zinc is the weakest metal, falling 0.7% to $3,686. MACRO & GEOPOLITICS Weaker-than-expected US employment growth has cut the estimated chance of an October Federal Reserve rate increase to below 20%, from 64% a week earlier. However, elevated Treasury yields and political concerns over French debt are keeping the dollar firm and pushing the euro lower. The US 10-year yield remains near 5.26%, keeping borrowing costs elevated. Brent crude has slipped towards $101.50 a barrel as additional Middle Eastern exports and G7 stock releases improve supply. Geopolitical risk remains high after Yemen’s internationally recognised government announced a campaign to recapture areas controlled by the Houthis. Britain is also considering tariffs on Chinese electric cars. BASE METALS Copper is 0.3% above Friday’s official close as softer US employment data reduces the immediate risk of another interest-rate increase. The benefit is being limited by the stronger dollar, which raises costs for buyers outside the United States. Aluminium is 0.5% above Friday’s close but remains under pressure after being on track for a sixth consecutive daily decline, with easing Gulf supply concerns and expected Indonesian capacity weighing on the market. Zinc is underperforming with a 0.7% drop, while nickel is slightly lower. Trading signals from Asia are limited because Chinese exchanges remain closed for the National Day holiday until Thursday, October 8. PRECIOUS METALS Gold has eased 0.3% to about $4,132 an ounce as dollar strength outweighs support from reduced expectations of an October US rate increase. The weaker employment report has limited the decline, but markets still see a strong chance of another increase in December. Silver has risen 0.9% to around $60.94 and platinum is 0.5% higher at $1,706. Palladium has slipped 0.2% to roughly $1,165. Middle East tensions and oil-price volatility remain important influences on inflation expectations and safe-haven buying. STEEL Britain is considering tariffs on subsidised Chinese electric cars, with ministers reportedly examining duties similar to the European Union’s levy of up to 45%. No UK tariff has yet been imposed. The issue could affect UK and European automotive supply chains, including vehicle production, component flows and demand for automotive steel. British automakers are also concerned that proposed “Made in Europe” rules could disadvantage UK suppliers selling components into EU automotive chains. Any policy alignment between Britain and the EU would increase trade barriers around Chinese vehicles. RARE EARTH METALS Critical-mineral supply security remains a concern despite improving political relations between India and China. Chinese licensing requirements covering seven heavy rare earths have exposed India’s dependence on imported materials for automotive and defence production. India has relaxed some investment restrictions and is encouraging technology joint ventures, but domestic manufacturing still relies heavily on Chinese components and expertise. Separately, growing recycling of batteries, solar panels, wind-turbine blades and retired grid equipment is expected to provide more recovered critical materials, although new mining and processing capacity will remain necessary to meet long-term demand. FOREX The euro has fallen about 0.6% to $1.1185, its lowest level in 17 months, as investors focus on France’s debt burden and political gridlock. The wider gap between French and German government borrowing costs is raising concern about pressure spreading through eurozone markets. The dollar index has gained roughly 0.5%, despite lower expectations of an October Federal Reserve increase. This combination makes dollar-priced metals more expensive for euro-area buyers. Sterling is also weaker near $1.3205, while the dollar is trading around 158 yen. WATCH TODAY Final September services and composite PMI readings are due from France, Germany, the eurozone and Britain this morning, alongside eurozone producer-price data for August. Final US services PMI figures are scheduled for 13:45 GMT, followed by the ISM services survey at 14:00 GMT.