US stocks fluctuated as markets digested the latest round of macroeconomic data ahead of the Fed meeting, where policymakers increased the rates by 25bps. Jerome Powell also hinted at a possible pause, aligning with forecast that suggested that this might be the last increase of this tightening cycle. On the economic front, ADP data surprised on the upside, highlighting the biggest private payrolls gains since July, growing 296,000 in March; this data comes as a slight contradiction to labour data earlier this week, which showed jobs opening falling 2-year lows. This discrepancy could be due to the fact that fewer people are switching jobs whilst employers continue to hire aggressively. The labour market still remains historically tight. Meanwhile, the US service sector expanded slightly to 51.9 in April, restrained only by the weakest business activity in nearly three years. The dollar and the 10yr US Treasury yield both edged lower.
Base metals remained broadly unchanged on the day ahead of the Fed meeting. Aluminium continued to weaken, with protracted selling pressures triggered below the support of $2,340/t; the metal closed at $2,321/t. Copper was also seen lower, but the robust support at $8,450/t held firm, and the metal hovered above, closing at $8,468.50/t. Lead weakened, erasing the last few days of gains, closing at $2,131/t. In China, maintenance for both primary and secondary lead is taking place, capping the overall production until the end of May. However, this was timed with the end off-season from the battery producers, which will likely help diminish the inventories and push lead prices higher domestically. Prices have remained range-bound in recent months, but the spread has flipped into a backwardation once again, highlighting the growing tightness assumption.
Oil futures plunged lower today, with WTI and Brent falling below $70/bl and $73/bl for the first time since March, as OPEC+ supply cuts struggled to dent overall supply. Gold and silver edged slightly higher by the end of the day, trading at the elevated levels of $2,024/oz and $25.40/oz, respectively.
All price data is from 03.05.2023 as of 17:30