US stocks weakened as markets assessed another day of corporate earnings results, awaiting the next moves from the Fed’s speakers. The Beige Book is being released today and should help guide sentiment in regard to the monetary policy outlook during the next meeting in May. The dollar remained unchanged, while the 10yr US Treasury yield edged higher. Elsewhere, UK inflation showed the price growth remained stubbornly high in the double digits, at 10.1% y/y, with grocery bills spiralling higher – food and non-alcoholic beverages saw prices increase by 19.1%, the highest since 1977. Markets quickly priced in another hike from the BOE, with forward swaps jumping to a 27bps increase, up from 19bps a couple of weeks ago.
Base metals offset some of the recent gains today, reaffirming that the longer-term support and resistance levels are remaining intact. With a lack of sustainable optimism coming out of China, we continue to see metals trading sideways, following the recent months’ moves. While homebuilder confidence in both China and the West should improve in the coming weeks, given the nearing end of the tightening cycle, cautious optimism prevails in the market, and we will continue to pay attention to micro moves. Copper weakened back below $9,000/t to close $8,965.50/t. Aluminium remained capped by the $2,440/t resistance level. Zinc weakened to close at $2,790/t. Lead remained broadly unchanged. Cash to 3-month spreads eased, in particular for copper and nickel, easing some of the tightness expectations.
Oil futures weakened, with WTI falling below $80/bl as Fed’s path is once again coming to the forefront of market focus. Gold and silver also saw some moderate declines, falling below $2,000/oz and $25.50/oz, respectively.
All price data is from 19.04.2023 as of 17:30