US stocks reopened today on the back foot following another round of corporate earnings releases, which will drive the sentiment across the equity markets this week. S&P 500 fell for the first time in four sessions, the dollar wavered between gains and losses and the 10yr US Treasury yield settled above 3.50%. All eyes are set on the Davos forum, where markets will be listening in to the clues regarding the global economic outlook. Several Fed officials, as well as ECB President Lagarde, are scheduled to appear this week. Meanwhile, the ECB policymakers are said to consider the option of slower-paced hikes in the next meetings. The markets are currently pricing in 50bps for the next meeting in February, but a March forecast is now seen declining from 50bps.
Meanwhile, the Chinese Vice Premier underscored the cautious optimism outlook given the economy’s reopening measures earlier this month. Chinese data releases pointed to better-than-expected GDP figures, growing by 2.9%, which is still lower than the previous quarter’s readings of 3.9% y/y. Likewise, both industrial production and retail sales exceeded expectations; however, the latter continued to decline year-on-year, at -1.8%, as the consumer sector faces the biggest hurdle to recover in the coming months. The sentiment, however, remained lacklustre across the base metals group today. Aluminium saw another day of moderate gains, but resistance at $2,630/t seems to have formed in the meantime; the metal settled at $2,618.50/t. Copper jumped above $9,200/t in the latter half of the day, offsetting yesterday’s losses, to close at $9,287/t; cash to 3-month spread also jumped higher to -$9.00/t, the tightness not seen since the end of last year. Lead and zinc closed marginally unchanged at $2,224.50/t and $3,295/t, respectively. Iron ore futures continued to edge higher, after hitting the support level of $120/mt, despite the government's pleas to control the price moves.
Oil futures responded better to China's economic data, with WTI and Brent trading at $80/bl and $85/bl, respectively. All precious metals were seen lower today; gold and silver weakened to $1,912/oz and $23.96/oz, respectively.
All price data is from 17.01.2023 as of 17:30