Gold and silver both trade higher leading into the European open

October 20, 2021

 London (Oct 20)  Once again both gold and silver are heading into the European session higher. Gold is 0.43% higher trading at $177/oz while silver has risen nearly 1% at $23.87/oz. In the rest of the commodities complex, copper has retraced -0.83% after a good run and spot WTI has dropped -0.70%.

In terms of risk sentiment, the Nikkei 225 (0.14%) and ASX (0.53%) traded well but the Shanghai Composite (-0.12%) bucked the trend to move lower. Futures in Europe are indicating a negative cash open.

There was not a great deal of movement in the FX majors overnight. The biggest mover was NZD/USD which rose another 0.24%. In the crypto space, bitcoin is meeting resistance at $64,899 and has dropped -0.78%.

China state media says that the expectation of a RRR cut from the PBOC in Q4 has fallen.

German September PPI +2.3% vs +1.0% m/m expected.

U.K. September CPI +3.1% vs +3.2% y/y expected.

China's Vice Commerce Minister will introduce measures to boost consumption.

Chinese new home prices in September +3.8% y/y (prior +4.2%).

China's 1 and 5 year LPR both left unchanged at 3.85% and 4.65% (18th consecutive month).

China says foreign direct investment January-September is +19.6% y/y.

Japanese trade balance for September Y -622.8bn (expected Y -519bn).

Australian Westpac leading indicator for September -0.02% m/m (prior -0.27% m/m).

China has suspended its imports from another Australian meatworks. This is said to be due to a detection of a chemical residue.

President Biden told Democrat lawmakers he believed they could secure an agreement for a tax and spending proposal valued at $1.75-90 tln.

The LME has said it is amending lending rules and implementing a backwardation limit and delivery deferral mechanism for copper. Changes as said to be temporary and will be reviewed regularly. 

Looking ahead to the rest of the session highlights include EZ CPI, Canadian CPI, and comments from ECB's Elderson and Fed's Bullard.


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