US stocks strengthened, led by tech shares, on the back of hopes of debt-ceiling discussions being resolved. This week is set to be quiet overall, with some macro data releases, including confidence indicators and PMIs. The latter, in particular, should once again highlight the case for weaker manufacturing in China, but the service sector is also showing signs of weakness after months of positive gains after the lockdown restriction reopening. Still, all eyes are on the debt-ceiling negotiations as the deadline for the resolution approaches early next week. The dollar dropped back below 104, and the 10yr US Treasury yield is now trading at 3.70%. Euro area inflation is set to have slowed considerably in May, given the softer energy impact; however, the overall trend of resilient core reading is set to remain intact. In particular, inflation expectations in the region fell to the lowest level since 2020, according to the European Commission data.
We saw some decent moves on the downside last week, especially in copper and zinc. Zinc weakened, falling to July 2020 lows, especially given the large inventory increases. We have seen a price recovery in the complex since, and today’s sentiment improved slightly on the open but struggled to hold momentum. The sentiment for this week is set to be quieter. Copper continued to remain supported above $8,100/t. Aluminium weakened below the support of $2,230/t and despite testing this level, continued to edge lower down to $2,224/t. Lead and zinc closed at $2,064/t and $2,302.50/t, with the spread between the two now at $473/t, summer 2020 lows.
Oil futures sold off after building doubts surrounding the future curbs from OPEC+; WTI and Brent have fallen to $69/bl and $74/bl. Gold and silver edged higher but remained near the lows of $1,960/oz and $23.26/oz, respectively.
All price data is from 30.05.2023 as of 17:30