Commodities: Across-the-board weakness as yuan slips
By Alexander Bueso
Date: Thursday 28 Jun 2018
(Sharecast News) - Commodities were seeing almost across-the-board weakness on Thursday evening in a mostly 'risk-off' session with weakness in Emerging Market FX, in particular, under the spotlight.
Thus, as of 1937 BST, the Bloomberg commodity index was trading 0.46% lower to 86.74, alongside a dip in the US dollar spot index of 0.03% to 95.2610.
Overnight, the Greenback had pushed 0.28% higher versus the Chinese yuan to 6.6270.
West Texas Intermediate crude oil futures were a notable exception, adding 0.87% to change hands at $73.39 per barrel on the NYMEX, which was just a smidgen below its 52-week highs.
Brent futures on the other hand were down by 0.01% at $77.61 a barrel.
Helping WTI was the ongoing tightness in supplies at Cushing, Oklahoma, the point at which the futures were priced.
The August 2018 gold contract on COMEX meanwhile was shedding 0.64% to $1,248.10/oz..
Copper was also moving lower, with the September contract on COMEX down by 1.8% at $2.9630/lb..
Analysts at UniCredit Bank nevertheless had an upbeat view on the outlook for prices.
"Given the prevailing risk-off sentiment, that level could be revisited again in the coming sessions, which would confirm a seven-month long sideways trading range between $6,500 and $7,300/ton," they said in a research note sent to clients.
"Copper's fundamentals have not changed since prices traded at the top of this range earlier this month. If anything, we continue to believe that they are set to tighten in H2 2018. This should ensure prices stay range-bound at worst, or start to push higher again."
Agricultural futures meanwhile were lower, with sizeable losses in corn, which was erasing 2.14% to trade at $3.54/bushel.
ICE-traded cocoa futures on the other hand were jumping 2.98% to $2,451 per metric tonne.
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