US stocks opened lower on Friday and remained at session's lows throughout the day but still managed to close the week higher. This week’s disruptive momentum triggered by SVB and Credit Suisse triggered major worries into the banking sector, and market confidence is yet to fully recover from these events. Next week, all eyes are on the Fed and the monetary policy meeting. We expect a 25bps hike to materialise on Wednesday, and markets will be listening in to Powell’s speech to help gauge whether this hike will be the last of the tightening cycle. At the same time, data today pointed to softening short-term inflationary expectations, with the index falling to the lowest level in two years, at 3.8%; consumer sentiment pulled back at the same time. The dollar continued to soften, and the 10yr US Treasury yield is at 3.41%.
Metals opened marginally higher today as fundamental support levels held firm and banking sector woes receded. Meanwhile, China’s central bank has cut the reserve requirement ratio by 25bps, marking the first move since December, in an effort to stimulate the economic recovery. This move is taking place at a time when the economy is expected to start gaining pace, especially from the consumer sector. We expect March service sector performance to benefit as a result of consumer spending on services and other non-discretionary items. Aluminium jumped to test the resistance level of $2,310/t before edging slightly lower to $2,274/t. Copper followed suit, testing the $8,700/t level before some softness brought it into a close of $8,580/t. Lead and zinc gained ground, closing at $2,089.50/t and $2,895/t, respectively.
Oil futures closed lower once again, with WTI and Brent settling at $66/bl and $72/bl, respectively. Gold and silver remained strong, once again highlighting the appetite for safe havens, now at $1,964/oz and $22.27/oz, respectively.
All price data is from 17.03.2023 as of 17:30