US stocks edged higher today following a rally in the tech sector. This caused the S&P 500 to test the 5,000 level, on hopes that the US economy will remain robust despite higher interest rates, avoiding a full-blown recession. Despite the sluggish seasonal momentum in February and the ongoing pressures from central banks, the gains show no signs of slowing down. This momentum should continue into the weekend as we expect the policymakers to reiterate their higher-for-longer narrative, keeping the dollar and the 10-year yield at current levels. The 10-year yield is now at 4.10%, and the dollar is above 1.04.
A mixed trading session was seen across the base metals space, with downward pressures being felt from elevated dollar and yields. Copper breached the $8,350/t level to trade at $8,315/t. Aluminium continued on a mean-reversion strategy, equalising around the $2,222/t level. As per our previous comment, nickel struggled below the robust support of $15,840/t but also lacked momentum to break back above the $16,000/t level, prompting prices to trade at $15,990/t. There is still a demand for prices to stay between the range of $16,000-16,500/t in the long run, and we expect that prices will average within this range in the upcoming months. Even if the prices drop, we do not expect them to remain low for a long time, and it is probable that the prices will eventually return to their current levels.
Oil futures edged higher after a mixed US crude stockpile report, which showed a rebound in oil production and a subsequent lift in inventories. Gold and silver fluctuated during the day but struggled to break out of the recent ranges, prompting prices to remain at $2,038/oz and $22.33/oz, respectively.
All price data is from 07.02.2024 as of 17:30