US stocks gained ground on the back of a slew of economic data releases today. Labour costs in the US are showing signs of easing, with the employment cost index increasing by 1.0% in Q4 2022, suggesting that wages may not be as upwardly sticky as originally thought. Consumer confidence however declined in January, but consumers remain upbeat about the labour market outlook. The Fed’s meeting will take place tomorrow, and policymakers are expected to raise the rates by 25bps. However, according to Governor Waller, officials are said to consider pausing the rates following the March meeting if more indicators point to a cooling inflation environment. The dollar and the 10yr US Treasury yield again remained broadly unchanged day-on-day. Meanwhile, the European economy narrowly avoided a contraction by the end of last year, growing by 0.1%. While the market responded positively to the news, with Euro improving for the first time in four days, the marginal increase in economic growth suggests the bloc is stagnating.
Mixed sentiment across the base metals today. Nickel jumped slightly higher following the news that the government is considering an up to 10% tax on nickel-ore exports for local producers to encourage local processing, which could impact the prices and production of the second-biggest nickel ore supplier. Higher taxes could inflate nickel ore prices from the region, and it could trickle down and accelerate costs for stainless steel mills, especially in China. Nickel prices settled above $30,000/t at $30,200/t. Copper and aluminium both jumped higher in the latter half of the day, settling at $9,216/t and $2,632/t, respectively. Lead and zinc closed lower at $2,136.50/t and $3,389/t, respectively.
Oil futures remained broadly unchanged, as markets speculate that OPEC+ will keep their production broadly unchanged during tomorrow’s meeting. Gold and silver fluctuated but settled at $1,927/oz and $23.70/oz, respectively.
All price data is from 31.01.2023 as of 17:30