US stocks weakened amid the elevated risk-off sentiment, triggering a flight to safe havens once again. The data out of the US pointed to softer demand in the consumer sector after the service sector expanded at a much slower pace in March, 52.6, given weaker new orders and softening business activity. At the same time, ADP pointed to slower job growth, with payrolls rising 145,000, while wage growth slowed, suggesting that the tightness in the labour market might be easing. This has brought the dollar higher to 101.80, while 2yr and 10yr Treasury yields weakened to 3.69% and 3.28%, respectively; the latter tested September lows. Still, Fed officials stand firm on hawkish rhetoric, with Fed Bank of Cleveland President Mester stating policymakers will need to raise interest rates a little bit higher and then keep them higher for longer to help combat inflation.
Metals faced another day of decline as investors shun away from riskier assets, driving the complex to settle lower on the day. A general downward sentiment and continued lack of momentum out of China are bringing metals down to their fundamental levels, erasing some of the risk-on sentiment that we saw take place last week. Aluminium weakened to close at $2,333.50/t; cash to 3-month, on the other hand, tightened slightly into -$41.00/t. Copper managed to find support at $8,700/t, settling at $8,782/t. Lead and zinc closed lower at $2,110.50/t and $2,789.50/t, respectively.
Oil futures remained elevated at $80/bl and $84/bl for WTI and Brent, respectively. Gold and silver remained near recent highs at $2,020/oz and $24.90/oz; gold is only $40/oz away from record highs, highlighting the flight to safe havens that took place in recent weeks.
All price data is from 05.04.2023 as of 17:30