US stocks closed Friday on the front foot as the dollar headed for another day of losses. With the blackout period from the Fed this week, we have seen tightening expectations fluctuate depending on the labour market performance. Still, markets might be hesitant to place big positions ahead of the central bank meetings next week. The 10yr US Treasury yield held firm at 3.75%. We believe that the Fed will keep the rates unchanged during the June meeting and continue that momentum into July, although inflation and labour data will continue to guide the market’s tightening expectations until then.
China’s inflation remained low in May, growing by 0.2% y/y, raising concerns over the weaker demand picture driving the downward price spiral. Producer prices declined by 4.6% on the back of lower commodity prices during the month. This data follows an array of softer releases from the region, with manufacturing activity continuing to decline while exports shrunk for the first time in three months. Expectations for a cut in interest rates are now building and could put further pressure on the renminbi, which continues to hold above 7.10. Meanwhile, a weaker dollar helped the base metal complex to edge slightly higher once again today. Aluminium and copper remained above $2,250/t and $8,350/t, respectively. Lead and zinc closed pretty much unchanged at $2,056/t and $2,404.50/t
Despite strong fluctuations during the quarter, oil futures remained broadly unchanged week-on-week, with WTI and Brent trading at $71/bl and $75/bl. Gold and silver wavered around $1,960/oz and $24.30/oz, respectively.
All price data is from 09.06.2023 as of 17:30