US stocks weakened as markets braced for the Federal Reserve decision later tonight, while markets digested another batch of economic releases. US private payrolls data pointed to more openings, increasing to 11m in December, underscoring the steady easing in the labour market. Meanwhile, US manufacturing gauge weakened for the fifth straight month, falling to 47.4, May 2020 lows. The dollar and the 10yr US Treasury yield both weakened. European stocks edged higher following the inflation data that pointed to faster-than-expected cooling, with year-on-year inflation growing at 8.5%; core reading remained sticky at 5.2%.
The mood soured across the metals market today, but volumes were low and declines marginal, with most metals closing broadly unchanged. Aluminium softened today, testing the support level of $2,585/t before settling slightly higher at $2,631.50/t; cash to 3-month spread remained at -$33/t. Likewise, copper weakened below $9,150/t, after prices struggled above $9,500/t. Nickel decline was slightly more robust, as the metal settled at $29,296/t. Lead and zinc also closed lower at $2,138.50/t and $3,349.50/t, respectively. The short-term indicators indicate an improving momentum in China. PMIs showed a slower pace of contraction, and other sources pointed to a sharp improvement into an expansionary territory. NBS pointed to an expansion, with manufacturing and non-manufacturing industries improving to 50.1 vs 54.4, respectively. Caixin pointed to a slower factory contraction, at 49.2 from 49.0 in December. Smaller firms and exporters are seeing greater headwinds amid weaker foreign demand.
Oil traded in a narrow range ahead of the Fed meeting, with WTI and Brent remaining at $78/bl and $84/bl. Gold and silver remained at $1,928/oz and $23.60/oz, respectively.
All price data is from 01.02.2023 as of 17:30