US stocks strengthened as tech shares led the gains once again today, supported by further hawkish rhetoric from today's panel featuring four of the world's top central bankers. Jerome Powell stated that he is not opposed to two consecutive hikes and that the economy remains resilient enough to take the impacts of higher rates and avoid a hard recession. The markets have increased their bets for further tightening; however, still not accounting for two rate increases, with 24bps being priced in by the end of the year. At the same time, policymakers do not believe that a 2% inflation could be reached this or next year, highlighting the persistence of pricing pressures over the longer term. Meanwhile, the ECB's Lagarde reiterated the recent sentiment, stating that the ECB still has ground to cover. The dollar jumped higher to test the 103 level, and the 10yr US Treasury yield remained unchanged.
Base metals weakened today, continuing the trend of gradual decline that we have seen in recent months. Bets are mounting for the Chinese economy to ramp up monetary and fiscal stimulus this year, accompanied by further cuts in rates on its 1yr policy loans, according to a Bloomberg survey. On the fiscal side, consumer tax breaks and increased infrastructure investment are seen as crucial in supporting key segments of the economy. However, to ensure effective recovery in confidence and growth, the former IMF official believes that the combination of stimulus measures alongside clearer guidelines is needed. Copper continued to fall, posting the fifth consecutive day of declines, testing the lows of $8,255/t before edging slightly higher to close at $8,255/t. Aluminium was softer, but the support at $2,150/t held firm once again, causing the metal to close at $2,173.50/t. Lead and zinc closed lower at $2,071/t and $2,349.50/t, respectively.
Oil futures jumped higher by the end of the day, with WTI and Brent trading at $69/bl and $73/bl. Gold and silver remained broadly unchanged, at $1,911/oz and $22.84/oz, respectively.
All price data is from 28.06.2023 as of 17:30