US stocks wavered today as the recent upside momentum cooled; on a YTD basis, the S&P 500 is still posting 13% gains. US Treasury yields jumped higher after another key central bank, the BOC, increased the rates by 25bps, pushing the bets for a hike in July from the Fed. The forward swaps briefly priced in full 25bps before easing back to 21bps. The dollar weakened below 104. From the macroeconomic perspective, the US trade gap widened in April, jumping to the largest level in six months after export growth cooled.
Another mixed day across the base metals complex, with zinc seeing strong gains on the upside, recovering the recent losses and pushing to a close of $2,398.50/t. We have seen increased activity from physical trades, supported by a weaker renminbi, which continues to hold above 7.10. Stronger demand for the dollar in the banking sector helped push the local currency to a six-month low, and as a result, we have seen the big state lenders effectively cut dollar deposit rates to help cushion the losses. To guide the fundamental trend for the complex, markets continue to watch out for further stimulus measures from policymakers, but we do not expect these to take full effect until the latter half of the year. Aluminium remained supported above $2,210/t, while copper fluctuated around $8,350/t. Lead closed at $2,044.50/t.
Oil futures gained ground on a weaker dollar, with WTI and Brent trading at $73/bl and $77/bl at the time of writing. Gold and silver were volatile but remained broadly unchanged by the end of the day at $1,950/oz and $23.60/oz, respectively.
All price data is from 07.06.2023 as of 17:30