US stocks climbed while Treasuries declined after data pointed to continued moderation in pricing pressures. US CPI softened below the 5.0% level for the first time in two years, down to 4.9% y/y; core softened marginally to 5.5%, down 10bps from last month. A narrower price measure showed an even more pronounced slowdown, with the smallest monthly increase since 2022 as airfares and hotel costs declined. The data has caused markets to price in a deeper cut by the end of the year, at 75bps worth. The dollar fluctuated but remained broadly unchanged on the day, and the 10yr US Treasury yield weakened slightly below 3.50%.
Base metals saw protracted weakness across the board after softer inflationary data. In particular, nickel suffered another day of robust losses, with prices declining back to the support level of $22,000/t; the metal closed at $22,540/t. Likewise, aluminium declined, but the support at $2,250/t held firm, causing the metal to settle slightly higher at $2,2671.50/t. Lead and zinc both closed lower at $2,136.50/t and $2,623.50/t, respectively. However, the losses in zinc were once again more protracted than in lead, as the weak stainless steel demand outlook continues to drive the risk-off sentiment. Iron ore futures remained supported above $100/mt.
Oil futures remained broadly unchanged at $72/bl and $76/bl for WTI and Brent. Gold and silver jumped higher after the inflation release, but these gains struggled to hold up, and we saw prices return to $2,024/oz and $25.35/oz, respectively.
All price data is from 10.05.2023 as of 17:30