US stocks wavered on Monday as markets digested last week's releases – Fed policymakers' speeches, economic data and debt-ceiling negotiations. In particular, debt ceiling discussions should be the main focus of this week's sentiment: with the hopes of it being resolved in the near term, the only downside right now is seen in regional banking. The dollar continued to show signs of revival, jumping above 102.50. Corporate earnings results from big retailers are out this week and should underline healthy consumption out of the region. Still, more focus should be paid to the EMs: with the rand recovering from the recent lows and TRY hinging on runoffs closer to the end of the month.
Across base metals, the robust support levels broke last week, and volatility increased. As of Monday, metals caught a bid but struggled to offset the previous losses. With central bank moves now out of the way, markets are beginning to price in a true slowdown in demand, and heavier focus should be paid to the fundamental picture. Any path lower should be quite controlled, and we do not expect a market slump. In the meantime, today's positive momentum helped to push aluminium back above $2,250/t, settling higher at $2,259.50/t. Copper found support at $8,200/t once again, triggering some upside to test the $8,350/t level; however, at the same time, markets lacked the incentive to push higher, and the metals remained broadly unchanged at $8,272.50/t. Lead settled at $2,072.50/t. Nickel and zinc continued to push lower, with the former testing the support of $22,000/t once again.
Oil futures jumped higher, driven in large by macroeconomic fundamentals, with WTI and Brent trading at $71/bl and $75/bl. Gold and silver edged higher to $2,016/oz and $24.05/oz, respectively.
All price data is from 15.05.2023 as of 17:30