The start of last week saw the conclusion of a revamped North American Free Trade Agreement between the U.S., Canada and Mexico. The NAFTA deal, hailed as "historic" by President Trump, sparked a rally across North American markets.

The mood was helped by confirmation that global mergers and acquisitions had climbed to a record US$3.3 trillion in the first nine months of 2018. This figure is 39% above last year as companies race to take advantage of record equity prices, buoyant consumer confidence and still relatively low borrowing costs.

Despite the market euphoria, last week was a relatively quiet one for the major metals, with the exception of aluminium. Gold improved 1.5% week-on-week to close on Friday at US$1,203/oz, and zinc and iron ore (62% Fe) were both marginally stronger over the seven-day period. Copper, however, fell slightly to US$6,203/t and nickel was also down 0.5%, to US$12,555/t. Thermal coal slipped 1.0% back below the US$100/t mark.

The stand-out performer last week was aluminium, which rose 3.1% to US$2,132/t but is still below the year's starting price of US$2,280/t. The metal is recovering during the final one-third of the year from a poor first four months of 2018 (when it fell 12.0%) and lacklustre second four-month period (up 3.3%). This was perhaps a reaction to a very strong price performance in 2017, when aluminium rose 12.0%, 11.5% and 6.6% during the three one-third periods last year, respectively (as noted in the 'Final Third' Picks & Blasts column of September 13).

The past week was marked by a further surge in the value of the U.S. dollar, and a sudden sell-off in bonds as belief builds in the sustainability of the U.S. economy following the NAFTA deal. Investors sense an end to the 30-year bull run in bonds, and, as a result, there was a jump in the yield on 10-year U.S. Treasuries, which rose above 3.2% on Thursday. Meanwhile, despite the higher dollar, Brent crude is at a four year high of around US$86/bbl.

The stronger dollar, rising interest rates on secure bonds and the higher oil prices have all had a knock-on effect on emerging market currencies and equity values, which are trading near their low for the year. The greater aversion to riskier economies was not helped by good news on U.S. employment, with the unemployment rate falling to its lowest level since 1969. Emerging market bond yields are now near their pre-crisis highs, with dollar-denominated investment-grade EM corporate bonds now typically yielding 4.8%.

Not everyone is risk averse. On Friday, Centar Ltd (not to be confused with Centaur Mining), and its operating company Afghan Gold and Minerals Co., signed a contract with the Afghan government for the exploration of copper and gold deposits in the north of the country. The New York Times warned that watchdog groups say, "aspects of the contracts may violate the law, and aggravate questionable practices that have marred the mining sector for years". The contracts were signed in Washington between the Afghan ministers of finance and mining, and executives from Centar, an investment company founded in 2010 by Ian Hannam, a former J.P. Morgan banker who partnered with local Afghan firms to bid for the mines. Centar had won approval from Kabul in 2014 to develop the Balkhab copper project but had not previously been able to agree terms. The Financial Times reports that the U.S. Department of Defense had identified the assets, and the Trump administration had financed the tender process.