US stocks wavered today following another remark from Jerome Powell, suggesting that policymakers have not yet made any decision about the March meeting. The Fed Chair reiterated that the central bank intends to keep the rates higher than previously anticipated, but today’s follow-up message added uncertainty to the near-term monetary policy outlook. The swaps have brought forward some of the tightening as a result, with the March meeting now forecast to increase by 40bps. US jobs opening data fell to 10.8m in February, still remaining historically high for the Fed. Another labour data report on Friday is forecast to show signs of slowing, following the unexpectedly high nonfarm payroll figure in January. The dollar tested the 105.50 support, and the 10yr US Treasury yield fell below 4.00%. Elsewhere, European Q4’22 GDP data was downgraded slightly, bringing the overall performance down to a stall to 0.0% after disappointing Germany and Spain's growth.
Metals opened on the back foot, driven by a combination of strong dollar moves; however, Powell’s remarks brought some risk-on sentiment back, and most metals closed higher on the day. Aluminium opened lower, testing the support of $2,320/t, amid improved supply view from China after Yunnan smelters were said to have satisfied the necessary output cuts to comply with the power rationing requirements. Aluminium bounded back and traded unchanged on the day to $2,354/t. Likewise, copper followed suit, in part after China is said to increase the export of material in the coming weeks on the back of muted domestic demand; the metal still closed higher at $8,910.50/t. The lacklustre demand is further highlighted by wide cash to 3-month spreads that remain in deep contango. With the market entering a traditionally high output season, we will start paying close attention to operating rates in the region in the coming weeks. Lead and zinc closed at $2,092/t and $2,975/t, respectively.
Oil futures saw continued weakness, driving WTI and Brent down to $76/bl and $82/bl, respectively. Gold and silver gained a footing by the end of the day to $1,820/oz and $20.10/oz, respectively.
All price data is from 08.03.2023 as of 17:30