US stocks started the week off on the front foot, with tech earnings the key focus this week. Analysts are still optimistic about company prospects, but we anticipate the results to point a weakening demand picture. 80m equity options rolled recently, the most in almost a decade, highlighting ample liquidity in the market. The economic calendar is relatively quiet this week, with US GDP unlikely to impact the markets strongly. With appetite from China lower over the holiday period, attention will once again turn to Western economic releases to help drive the sentiment. Still, the markets are calling in the victory on recession too early, and we are likely to see the divergence in developed economies' slowdown over the course of the year. The dollar continued to find support at 102, and the 10yr US Treasury yield back above 3.50%. Meanwhile, Euro area consumer confidence continued to ease slightly from -22.2 during the previous month, now at -20.9, given easing energy pressures.
Open interest and volumes are diminishing, and the sentiment today was lacklustre across the board, with metals struggling to gain momentum during the day. Aluminium continued to pare gains, jumping higher above $2,620/t in the latter half of the day to settle at $2,636.50/t at the time of writing. Copper opened higher but weakened during the day, falling back down to $9,356/t; cash to 3-month spread tightened sharply into -$12.00/t. Iron ore futures continued to trace higher despite government plans to quell price growth; prices settled higher at $125/mt. Lead and zinc closed broadly unchanged at $2,055/t and $3,420.50/t, respectively.
Oil futures continued to edge higher, with today's gains testing the November highs of $82/bl and $88/bl for WTI and Brent, respectively. Gold and silver softened, with silver seeing a more protracted weakness in the latter part of the day to $23.24/oz.
All price data is from 23.01.2023 as of 17:30
