US stocks strengthened on the back of growing hopes that a narrower Washington negotiator group could help break the deadlock on raising the debt ceiling levels. Markets are not yet getting excited about this resolution, but many remain hopeful that a positive outcome will be reached. The dollar continued to gain ground, and the 10yr US Treasury yield also edged higher. Elsewhere, China’s home price growth stalled in April, rising by 0.32% m/m, highlighting potential challenges in the housing market despite recent recovery.
Base metals prices rebounded strongly today as support levels held firm, helping to offset yesterday’s losses. Still, the upside momentum was not enough to break back above last week’s robust levels. The metals outlook remains centred around China’s story, and we expect markets to trade sideways, waiting for the next best move. From the fundamental standpoint, there is also a lack of strong momentum: while production from China continues to improve, consumption remains lacklustre, resulting in building inventories for end-users. Copper bounced off the support level at $8,100/t, back above $8,250/t to close at $2,296.50/t. Aluminium also strengthened, but resistance at $2,300/t held firm and the metal close below at $2,296.50/t. Gains in stainless steel materials, such as zinc and nickel, were lacklustre, suggesting a stronger fundamental downside pressure on these metals in the near term. Both metals closed at $2,524/t and $21,334/t, respectively.
Oil futures jumped higher on the back of renewed optimism, pushing WTI and Brent to $72/bl and $76/bl. Losses in gold and silver remained lacklustre, given last night’s declines, as the metals traded at $1,980/oz and $23.67/oz, respectively.
All price data is from 17.05.2023 as of 17:30
