US stocks bounded back today, with banks driving the rebound as many anticipate that this outlier event has now passed. At the same time, inflation came in line with market expectations of 6.0% y/y growth, and core indicator grew at the fastest rate in six months, at 0.5% m/m. Treasury yields jumped higher but struggled to recover most of the recent days’ losses. The 10yr yield is now at 3.62%; 2yr yield – is 4.36%. The dollar fluctuated following the inflation report but remained broadly unchanged on the day at 103.80.
Base metals sentiment wavered today, and the complex closed pretty much unchanged on the day. Aluminium continued to pare moderate gains, strengthening to $2,352.50/t; the cash to 3-month spread, however, widened further, retesting the lows of -$50.50/t, further highlighting the muted demand conditions. Copper opened lower, and it fluctuated around $8,850/t during the day, settling at $8,833.50/t. In line with aluminium, we saw downstream demand for copper resume in recent weeks. Wire and cable factories started to actively purchase materials again, but this is largely in due to a large backlog of copper scrap rod at producers. Meanwhile, Peru’s exports of copper came in 25% lower y/y, even as output remained stable throughout the unrest. While the government says that most of the roadblocks are now over, January data highlighted the transportation difficulty for producers, and we expect this carried over to most of February. Lead and zinc closed broadly unchanged at $2,085.50/t and $2,909.50/t, respectively.
Oil extended declines: WTI and Brent are now at $73/bl and $79/bl. Gold and silver weakened after three gains of inclines; the metals settled at $1,908/oz and $21.96/oz, respectively.
All price data is from 14.03.2023 as of 17:30
