When the US Federal Reserve raised interest rates for the first time in nearly a decade on Wednesday, global markets were pretty pleased to say the least.
Both bonds and the dollar surged, Asian equity indexes had a very happy day, and at the open on Thursday morning, the FTSE100 popped by nearly 1.5%.
Joy at Janet Yellen hiking for the first time since 2006 didn’t spread across all of the markets though, and the commodities sector continues to feel the pain its been feeling for over five years.
The vast majority of commodities are suffering losses on Thursday, with everything from coffee to copper in the red.
Things have hit the metals industry particularly hard. Of the 11 major metals traded on US and UK exchanges, all have lost value, and nine are currently trading down by more than 1%. The worst affected are lead, zinc, and palladium, which have all seen a drop of more than 2% as of 1:00 p.m. GMT (8:00 a.m. ET)
The main driver of the falls today is the Fed’s rate hike causing the dollar to strengthen. The dollar index is up by nearly 0.5% since yesterday’s announcement.
The dollar’s strength, along with worries about the future of China’s construction industrey, has been the main driver of metals losing nearly a third of their value in 2015. Bloomberg’s industrial metals index has dropped from 126.3 to 87.1 since this time last year.
This is what metals look like at lunchtime in Europe. Lead is at a six-year low:
While zinc prices are continuing the slide that has seen a loss of more than 35% since April, and are now at their lowest levels since 2009:
Elsewhere in the commodity sector, oil seems to have settled down a little bit after a particularly hectic few days. Brent crude is trading up by around 0.5%, while WTI crude is down a third of a per cent.
Business Insider Emails & Alerts
Site highlights each day to your inbox.