US stocks softened marginally by the end of the day, as earlier gains were found to be unsustainable. US CPI figure softened to the slowest level in 2 years, at 5.0% y/y; however, core inflation struggled to show comparable signs of a slowdown, growing at 5.6% y/y. Moreover, the PPI remains sticky or slightly above expectations, which continues to add pressures to consumer prices over the longer term. Markets still largely bet on a 25bps hike during the Fed’s next meeting in May while maintaining the view of cuts in the second half of the year. The dollar declined to 101.50 but found support at this level and is now trading at 101.64. The 10yr US Treasury yield remained unchanged at 3.40%; the 2yr yield also held firm at 4.00%. Friday’s data on retail sales, industrial production, and consumer sentiment should highlight the health of the other economic sectors in March.
Base metals performance was the inverse of the moves seen in US stocks; metals dipped sharply following the CPI release, but quickly regained momentum and settled higher on the day. Aluminium tested support of $2,300/t, but this level held firm, and the metal came back to close at $2,325/t. Copper's robust support at $8,800/t triggered strong buying pressure back to $8,916.50/t. Lead and zinc closed higher at $2,129/t and $2,785/t, respectively.
Oil futures remained elevated at $82/bl and $86/bl for WTI and Brent, respectively, as a tighter supply outlook squeezed prices to this year’s new highs. Gold jumped higher, testing recent highs of $2,025/oz, while silver breached the $25.00/oz level, the highs not seen since April 2022.
All price data is from 12.04.2023 as of 17:30