Chinese PMI helps lift FTSE miners, as market continue to feel inflation boost

• Chinese data helps boost FTSE miners
• Oil prices fail to take advantage of OPEC production cuts
• US expected to continue their rise, as yields head lower

The FTSE 100 has enjoyed a welcome boost in early trade today, as its commodity focus finally comes back in favour after being hamstrung by energy stocks for much of the week. Instead, we are seeing great optimism for UK listed mining stocks, with a surprise jump in the Chinese Caixin manufacturing PMI figure helping to push the likes of Anglo American, Antofagasta, Rio Tinto, and Glencore sharply higher. While the rebound back into expansion for this Chinese manufacturing gauge brings some welcome positivity for now, the need for additional stimulus from the PBoC remains evident given Thursday’s deeper contraction for the headline PMI figure.

Oil prices remain of unsteady ground despite OPEC efforts to squeeze the supply side dynamics by pledging an additional 1-million barrels per day production cut. Thankfully for markets, the response has been less than favourable for OPEC, with WTI heading sharply lower. With the OECD expecting to see global growth slow in 2024, the weakening demand picture remains a key driver of this pessimistic sentiment around oil and gas prices. Yesterday’s eurozone inflation data served to highlight the benefits of keeping a lid on energy prices, with further declines likely to help calls for a timelier return to target for inflation around the world.

US markets are expected to kick off a new month on the front foot, with treasury yields weakening after yesterday’s unwelcome rebound. With tech stocks highly responsive to the 10-year yield, yesterday’s Nasdaq underperformance looks likely to reverse as long as yields can maintain the declines seen in early trade today. With eurozone inflation falling back down to 2.4%, markets have been reminded how close we are to a dovish pivot from the likes of the ECB and FOMC. Gold and crypto are outperforming once again today, there is a clear desire for traders to get ahead of the curve in a bid to position themselves for the 2024 commencement of monetary easing.