- Asian markets down, failing to follow Wall Street’s lead
- FTSE opens down 0.5% at 7,493
- Gold hits new highs
- Electric vehicle manufacturers face metals supply crunch
- Brent crude down 0.9% to $78.24 per barrel
Derren Nathan, head of market research at Hargreaves Lansdown:
“As we enter the final furlong for 2023, US markets are back to 12-month highs. But the optimism provided by Federal Reserve Bank Chairman Jerome Powell’s comments on Friday, that monetary policy is starting achieve its goals, hasn’t spread to Asian markets in overnight trading. So, it’s still too early to call if this was the starting gun for a Santa Rally. Despite strengthening hopes that rates have peaked, a recent string of poor output indicators for China are weighing on the region. The Hang Seng has dropped over 1% and the major Chinese and Japanese indices are also down. The FTSE 100 has also started the week in negative territory.
The notion that monetary policy’s grip isn’t going to get any tighter has helped push bullion prices to record highs. An ounce of the shiny stuff will now set you back close to $2,100 and speculation is building that there could be more to come.
But there are also longer-term forces building that could see other commodities prosper. A Brussels-based campaign group Transport & Environment (T&E), reveals that European automobile manufacturers have only secured some 16% of the transition metals (lithium, cobalt and nickel) to meet their promises for sales of electric vehicles by 2030, just five years before gasoline powered cars are banned completely.
Concerns about long-term demand are a constant factor in today’s oil market but for now its supply that is driving prices. Scepticism over how tightly enforced the latest round of OPEC+ production cuts, as well as concerns about demand from China are keeping a lid on prices. At just over $78, the value of a barrel of Brent Crude has fallen nearly 8% in just one week including nearly a 1% slide today.”
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