Stocks fluctuated after Fed’s Powell refrained from giving any comments in regard to the monetary policy outlook at a forum meeting today. The forward swaps continue to price in a 50bps hike by the end of the month, and the subsequent meetings could see further downgrades given the inflation comes in lower on Thursday. The dollar settled at 103.20, and the 10yr US Treasury yield found support at 4.26%. Elsewhere, Goldman Sachs upgraded its Eurozone outlook to no longer fall into a recession this year and instead to grow at a 0.6% pace. The World Bank, on the other hand, slashed its forecast for most economies and warned of the looming recession risks, as it now sees global growth settle at 1.7% this year.
A mixed performance is seen across the base metals group today following yesterday’s rally as the markets are taking China’s sentiment as well as the monetary policy outlook in the US into account. Chinese government unleashed a slew of policy support for the economy amid the reopening of lockdown restrictions. But with demand remaining subdued amid a traditionally off-peak season, the metals outlook remained muted. Aluminium continued to trace higher, breaking above the resistance level of $2,450/t to settle at $X/t; the cash to 3-month spread settled at -$34.50/t. Likewise, copper found strength in the latter half of the day after the metal found support at $8,750/t to edge up to $X/t. Lead and zinc closed lower, reversing yesterday’s gains at $2,200/t and $3,160.50/t, respectively.
Oil futures also struggled to break out of the current range as WTI and Brent remained broadly unchanged at $75/bl and $79/bl. Gold and silver traded at $1,875/oz and $23.60/oz, respectively.
All price data is from 10.01.2023 as of 17:30