Dr Copper also recently breached US$13,000 for the first time in LME trading history, buoyed by speculation about potential US tariffs and infrastructure spending demands linked to Venezuela’s reconstruction. Crude markets also found support, with WTI rallying nearly 2.0% as the intervention cast fresh uncertainty over access to Oil reserves.
Across the FX space, the USD settled modestly lower, down 0.1% and well off its best levels. US Treasury yields also ended the session lower across the curve, with the benchmark 10-year yield snapping a three-session advance and testing 4.16%. Bond markets now face competing narratives – geopolitical developments supporting safe-haven demand versus persistent inflation concerns and fiscal policy uncertainties that could dampen appetite for US debt.
US Manufacturing Sector Signals Continued Weakness
On the macro front, Monday saw the release of the December ISM Manufacturing PMI, which showed activity contracting to 47.9 from 48.2 in November. Survey respondents emphasised tariff uncertainty as a persistent headwind.
Interestingly, the employment sub-index rose to 44.9 from 44.0, yet remains mired in contractionary territory for an eleventh consecutive month. Meanwhile, the prices-paid component held steady at 58.5, underscoring the stubbornness of inflationary pressures – a challenging backdrop for policymakers.
Inflation Data on the Horizon
While the economic data docket remains thin today, things heat up tomorrow with Australian and eurozone CPI inflation data for November and December, respectively.
