US stocks pushed lower today after a number of Federal Reserve speakers reaffirmed their resolve to keep the rates higher for longer. Other speakers have echoed market concerns surrounding the inflation outlook, highlighting prevailing uncertainty in the market. Bank of NY President Williams stated that if the situation changes, the bank can move faster than 25bps hikes. Still, the consensus of 5-5.25% peak rates is now mostly pencilled in by policymakers. The forward swaps have shifted the pivot and scale of the Fed pivot slightly down the curve. The dollar and the 10yr US Treasury yield remained unchanged. Meanwhile, used car prices have jumped higher in January, growing by 2.5% m/m, following a surprising 15% y/y decline in December. this is due to the high base of performance by the end of 2021 when supply chain bottlenecks intensify, and we expect demand for vehicles in the US is expected to remain stable in Q1’23.#
Market momentum continues to be driven in large by macroeconomic factors, as the Chinese story recovery is developing slower than markets originally anticipated. Aluminium prices weakened for the sixth straight day, testing support at $2,480/t and settling at $2,481/t. The metals decline has also benefitted from the data pointing to a sharp increase, up by 100,000 tonnes, in stockpiles in South Korea. The cash to 3-month spread remained low at -$40/t as a result. Copper opened on the front foot, but the momentum did not last, as prices struggled above $9,000/t, and the metal settled lower at $8,892.50/t. Nickel fluctuated but remained broadly unchanged at $27,390/t. Lead and zinc closed at $2,120.50/t and $3,1,32/t, respectively.
Oil futures remained unchanged; WTI and Brent settled at $77/bl and $83/bl. Gold and silver wavered and settled at $1,873/oz and $22.30/oz, respectively.
All price data is from 08.02.2023 as of 17:30