US stocks fell amid mixed corporate earnings results; the Fed’s future path remains at the forefront of market focus. Given the start of the earnings season, we expect the upcoming results to guide market sentiment in the coming weeks ahead of the central bank meeting in May. US business activity climbed to a near one-year high, adding risks to inflation stickiness, especially in the service sector. Fed Bank of Philadelphia President Harker stated that the Fed is getting near the end of its tightening cycle to calm prices. Meanwhile, Cleveland President Mester noted she favoured getting rates above 5% because inflation was still too high. The dollar fluctuated but struggled to break the 102 level, and the 10yr US Treasury yield remained unchanged. Elsewhere, Japan’s inflation continued to outpace expectations, growing at 3.1% y/y, adding pressure to the next BOJ meeting.
Base metals saw another day of moderate declines across the board, as a lack of optimism from the macroeconomic and fundamental viewpoints pushed the metals back to long-term support levels. Aluminium fell below $2,400/t, closing at $2,397.50/t. Copper continued to fall below the $9,000/t mark, testing the 100-day MA at $8,797/t. Zinc pared the third consecutive day of declines, testing the October lows and closing at $2,719/t. Lead, on the other hand, struggled to break below the support level of $2,140/t once again, closing at $2,161/t. Iron ore futures sold off, falling by more than 4.0% on the day, testing the December lows of $108/mt, as lacklustre demand from China is seen coupled with the peak building season, putting pressure on the prices in the near term. The next day’s prices opened lower, breaking below the $106/mt level.
Oil futures remained supported at current levels. Gold and silver declined once again to $19,75/oz and $24.97/oz, respectively.
All price data is from 21.04.2023 as of 17:30