Morning Macro 28th October
Gold drops convincingly below $4k/oz, now trading near $3.9k/oz. Other precious metals are also struggling with silver falling towards $45/oz and palladium and platinum down hard. But copper is performing better, continuing its recovery from its late-July tariff driven volatility. It has recovered to over $5/lb. (Figure 1) Anglo American reported a 9% drop in copper output in Jan-Sep this year.
Equities cool from their post-weekend record highs, as the Hang Seng and Nikkei each fall around 0.33% and S&P 500 Emini futures are down 0.1% this morning. Concerns over concentration of the equity market continue but the long-term trend shows only 3.44% of companies have driven all net wealth in the US stock market in a century. (Figure 2)
Dollar/yen continues long term up trend but finding significant resistance at 153 (Figure 3). Markets expect Bank of Japan to continue hiking cycle, with OIS pricing 47.4 bps of hikes over the next 12 months, up from 35.8 bps in mid-October.
Amazon is reportedly preparing massive job cuts of up to 30,000 corporate employees. This would be the company’s biggest ever layoff at nearly 10% of total corporate employees and shares rose 1.2% yesterday and are higher in pre-market trading this morning.
There are mixed signals coming from Germany, as Ifo Business Climate was stronger than expected at 88.4 and Expectations were up at 91.6. Yet, this morning’s GfK Consumer confidence was much weaker than hoped, down at -24.1, even below expectations for -22. The measure has been negative since December 2021!
South Korea is performing better, as GDP grew 1.7% y/y in Q3, far ahead of expectations for 0.9%. That was the strongest quarter of growth since Q2 2024. China’s Ministry of Commerce said it signed an upgraded free trade agreement with ASEAN nations today, focussing on supply chains and trade facilitation. Meanwhile, Trump says he’s open to meeting Kim Jong Un in his Asia visit. The US government shutdown reaches 28 days – one more week and it will be a record!
Data today – India industrial and manufacturing production, Redbook
