US stocks rose as a combination of debt-ceiling discussion optimism and positive data out of the US have triggered risk-on sentiment. Data on consumer spending highlighted a picture of a resilient economy, adding momentum to Fed's hiking bets to bring inflation back to target. The PCE index, the preferred inflation gauge, rose by a faster-than-expected 0.4% last month. The forward swaps are now pricing in 26bps worth of hikes over the course of the next two meetings. Over the longer-term, inflationary expectations eased slightly to 3.1% for the outlook over the next ten years. The dollar held firm above 104, and the 10yr US Treasury yield is now trading at 3.82%.
Base metals jumped higher today after days of downward pressure, as yesterday’s support levels held firm. The complex still closed lower week-on-week. Zinc, in particular, saw strong recoveries after four consecutive days of declines, as the support level at $2,240/t held firm and the metal closed at $2,343.50/t. Copper gained ground back above $8,000/t to close at $8,135/t. Iron ore futures also strengthened back above $100/mt, and the next day’s trading remained comfortable above this level. Lead closed at $2,078.50/t.
Despite positive sentiment across the board, precious metals held their support and edged slightly higher, with gold and silver now at $1,940/oz and $23.10/oz, respectively. WTI and Brent edged higher to $72/bl and $77/bl.
All price data is from 26.05.2023 as of 17:30