US stocks fluctuated after another remark by Jerome Powell arguing the case for further tightening from the Fed to contain inflationary pressures and quell growth. Despite the view of two more hikes from the central bank, the forward swaps are only pricing in 26bps by November this year. This follows the unexpected move from the BOE to increase interest rates by 50bps today, bringing the overall level to 2008 highs. While 133bps are being priced in until the end of the year, the pound struggled to hold to the gains made immediately after the announcement. Meanwhile, the dollar continued to edge higher, and the 2yr US Treasury yield is now at 4.76%. After the strong housing starts figure, sales of previously-owned homes showed a marginal increase in May, growing by 0.2% m/m; on a year-on-year basis, sales still remain down by more than 18%.
Base metals settled pretty much unchanged, despite fluctuations seen earlier today. Copper jumped higher to test the resistance of $8,867/t; however, it struggled to hold above this level, coming back down to $8,574/t. Copper cash to 3-month spread continued to climb further into backwardation, testing this year’s highs at $18/t. Lead struggled above the resistance of $2,190/t, marking the first day of moderate declines after nine consecutive days of upward momentum; the metal closed at $2,163.50/t. Aluminium, on the other hand, broke below the robust support of $2,200/t during the day before bouncing back above this level; the metal is now seen testing this level once again. Zinc closed at $2,456/t.
Oil futures sold off after Fed’s hawkish comment, with WTI and Brent $69/bl and $74/bl. Gold and silver continued to weaken marginally to $1,914/oz and $22.42/oz, respectively.
All price data is from 22.06.2023 as of 17:30
