The most-traded SHFE aluminium contract opened at RMB 23,255per tonne in the night session on Oct 8, hit a high of RMB 23,365 per tonne and a low of RMB 23,195 per tonne, and closed at RMB 23,220 per tonne, down RMB 165 per tonne or 0.71 from the previous close. Futures quickly dipped and weakened, with prices falling below all cyclical moving averages of 5/10/20/40/60. All moving averages turned downward to form resistance, highlighting a bearish pattern. Trading volume during the session was 74,115 lots, with open interest at 269,000 lots, down 819 lots, mainly driven by bulls cutting positions and exiting. On the technical front, the 4-hour MACD death cross continued, with DIFF well below DEA.
Green bars expanded significantly, and bearish momentum continued to be released. The LME aluminium 3M contract opened at USD 3,125.0 per tonne on Oct 8, hit a high of USD 3,156.0 per tonne and a low of USD 3,041.5 per tonne, and closed at USD 3,042.0 per tonne, down USD 83.0 per tonne or 2.66 per cent from the previous close. Futures plunged sharply, with prices falling below all cyclical moving averages of 5/10/20/40/60. All moving averages exerted downward pressure, further strengthening the bearish trend. Trading volume during the session was 29,262 lots, with open interest at 567,000 lots, down 339 lots, mainly driven by bulls cutting positions and exiting. On the technical front, the daily MACD death cross continued, with DIFF below DEA. Green bars kept expanding, and bearish momentum was released in a concentrated manner.
St. Louis Fed President Musalem said the US Fed needs to raise interest rates again to push inflation back to the 2 per cent target. He said monetary policy needs to be tightened further to achieve the inflation target in a “timely” manner. Musalem said if “timely” means about 18 months, rates may need to be raised further at appropriate times over the next 6 to 9 months. Data released by the US Labor Department on Thursday showed that initial jobless claims in the US fell by 2,000 WoW to a seasonally adjusted 197,000 in the week ended Oct 3, below market expectations of 200,000, and remained near a 57-year low for the fourth consecutive week. Meanwhile, September nonfarm payrolls released last Friday increased by only 29,000, far below market expectations, indicating a clear cooling in hiring demand. According to CME “FedWatch”: The probability of the Fed keeping rates unchanged in October is 82.3 per cent, and the probability of a cumulative 25bp hike is 17.7 per cent. The probability of the Fed keeping rates unchanged in December is 18.7 per cent, the probability of a cumulative 25bp hike is 67.6 per cent, and the probability of a cumulative 50bp hike is 13.7 per cent.