Last week there were sharp declines in the raw materials market.
Last week there were sharp declines in the commodity market due to concerns that the US Federal Reserve (Fed) will keep interest rates high for a long time.
The raw materials market has left behind a week of intense selling pressure.
The data announced in the US, indicating a continued firm stance in the labor market, increased concerns that the Federal Reserve will continue its restrictive monetary policy for a long time, causing selling pressure to continue in the commodities market cousins.
Non-farm employment in the US increased by 336 thousand people in September, exceeding expectations. In the country, the number of JOLTS vacancies exceeded market expectations, increasing by 690 thousand to 9 million 610 thousand in August compared to the previous month.
The FED’s harsh statement was effective
Tough statements from members of the Federal Reserve also came to light last week.
Michelle Bowman, known as one of the most hawkish members of the Federal Reserve board, reiterated her call for multiple interest rate increases and said it would be appropriate to keep interest rates at a restrictive level for a while longer.
Federal Reserve Vice Chairman of Supervision Michael Barr also said he agreed with Powell’s assessment that “we have to proceed carefully when it comes to interest rates.”
Arguing that the most important question is not whether additional interest rate increases are needed this year, but rather how long interest rates should be kept at a sufficiently restrictive level, Barr said he believes this will take some time.
Cleveland Fed President Loretta Mester also said: “We will probably have to raise interest rates once again this year and then keep them higher for a while to catch up with inflation.” saying.
THE INCREASE IN BONDS CREATED PRESSURE
The 10-year US Treasury bond rate, which last week tested a 16-year high at 4.88, ended the week at 4.7900 with an increase of 21 basis points.
Analysts said rising bond yields, with global interest rates expected to remain higher for a long time, are putting pressure on precious metals.
With this evolution, gold prices ended the week with a loss of 0.9 percent, silver 2.7 percent, palladium 7.2 percent and platinum 3 percent.
There were also sharp declines in base metals due to concerns about ongoing economic activity, especially in Asia.
While Japan’s September manufacturing purchasing managers’ index (PMI) was 48.5, China’s Caixin manufacturing September PMI was 50.6 and the services sector PMI was 50.6. 50.2, below forecasts, raised concerns about economic activity in the region.
In the over-the-counter market last week, prices decreased by 3 percent for copper, 0.7 percent for lead, 4.8 percent for aluminum, 1.4 percent for nickel and 4. .2 percent in zinc.
BRENT OIL LOSSES EXCEED 8 PERCENT
In the energy sector, a mixed evolution was observed last week.
Brent oil prices ended the week down 8.7 percent and natural gas prices traded on the New York Mercantile Exchange rose 13.7 percent.
Although Saudi Arabia and Russia reiterated that they would continue with the voluntary oil production cuts they implemented from July until the end of the year, signs of slowing economic activity around the world and rising US oil inventories. US for the first time in The last 2 months caused a sharp drop in oil prices.
Natural gas prices rose on expectations that air temperatures would decrease and demand for natural gas would increase in the US.
LATEST SITUATION OF AGRICULTURAL PRODUCTS
Regarding agricultural products, wheat prices traded on the Chicago Mercantile Exchange gained 4.9 percent, corn 3.2 percent and rice 0.8 percent, while wheat prices soybeans decreased 0.7 percent.
While the prices of cotton traded on the American Intercontinental Exchange decreased by 0.7 percent, that of coffee by 0.1 percent, sugar by 1.2 percent and cocoa increased by 1 percent.
Concerns coming from China and hawkish statements from members of the Federal Reserve negatively affected cotton, coffee and sugar prices.
Declining global wheat production estimates from the previous month caused prices to rise.
The United States Department of Agriculture (USDA) forecast for wheat production for the 2023/24 season decreased by 6.03 million from the previous month, reaching 787.34 million tons. (AA)