US stocks were pushed higher on the open today following the rally in tech equity as markets continue to assess the mixed economic data. US economic growth for Q4 was downgraded by 20bps after a downward revision in consumer spending data. At the same time, US initial jobless claims fell to 192,000 in the week ending February 18th, the lows not seen in four weeks, once again highlighting the resilience of labour market data. Continuing claims fell to December lows of 1.65m. Companies are holding on to employees given the recent hiring challenges, and many more are looking for a job given the growing recessionary fears, keeping the labour market tight. Data from the US continues to drive market sentiment across assets, and we expect the Fed will continue to push with more hawkish rhetoric of keeping terminal rates higher for longer to help combat inflation. The dollar edged higher, and the 10yr US Treasury yield settled at 3.91%. Meanwhile, eurozone inflation ticked up slightly higher to 8.6% in January, while the core reached a record high of 5.3%, further reinforcing the ECB’s hawkish rhetoric.
Downbeat sentiment prevailed across the base metals market today as markets weighed on the monetary policy outlook from the Fed and the ECB. Aluminium weakened marginally, breaking below $2,400/t and closed at $2,396/t. Likewise, copper jumped below $9,000/t on the back of the risk-off sentiment, triggering a $8,904/t level on the close. Downstream buyers remained on the back foot, and recent price declines supported this. However, the divergence between copper scrap and cathode prices in the market prompted some buyers to purchase scrap. Lead and zinc closed lower at $2,056/t and $3,034.50/t, respectively.
Oil futures regained yesterday’s losses after the WTI and Brent contracts hit the support levels of $74/bl and $80.50/bl, respectively. Precious metals weakened slightly, with gold and silver falling to $1,820/oz and $21.40/oz.
All price data is from 23.02.2023 as of 17:30