US stocks opened lower today, despite economic data pointing to softer labour, housing and business conditions. So far this year, softer economic releases, especially from the labour market, have acted as a risk-on incentive, as markets saw easing pressures on the central bank to hike. Now, the markets have nearly priced in a 25bps hike in May, and the focus is being shifted back to the economic outlook and, in turn, recessionary fears. While we do not yet see signs of contraction in the economy, we expect investors to pay closer attention to the signs of slowing momentum in the coming months. Initial jobless claims came in slightly higher than expected, at 245,000 in the week ending April 15th, whilst sales of previously-owned homes fell to 4.44m in March. The dollar weakened, and the 10yr US Treasury yield edged lower to 3.52%
Another day of the marginal downside was seen across the base metals complex today. Aluminium wavered, weakening sharply in the latter half of the day after prices rejected levels above $2,460/t. Likewise, copper struggled above $8,950/t and closed lower to $8,881/t. Lead and zinc closed marginally lower at $2,153/t and $2,770/t, respectively. Zinc cash to 3-month spread has widened broadly in recent days, falling into contango of -$12.50/t, November 2022 lows, as there were fewer spot arrivals in the market, greatly pushing up domestic premiums.
Oil futures continued to weaken as US slowdown fears overshadowed a substantial drawdown in crude stockpiles. WTI and Brent fell into $77/bl and $81/bl. Gold and silver saw some marginal upside today, as support levels at $2,000/oz and $25.00/oz held firm.
All price data is from 20.04.2023 as of 17:30