US stocks opened lower after nonfarm payroll data pointed to slower hiring, up by 209,000, suggesting that the labour market tightness might be easing. Unemployment traditionally lags behind the hiring data, and only consistent declines in employment would translate into easing labour market conditions; in the meantime, June’s unemployment ticked lower to 3.6%. In the meantime, June’s wage growth of 0.4% highlights that businesses are still struggling to hire and keep employees. The forward swaps continue to price in 22bps from the Fed this month. The dollar and the 2yr Treasury yield both weakened today.
Another mixed day of trading on the LME exchange today. Aluminium recovered most of yesterday’s losses but still struggled to break above the $2,150/t level, closing at $2,145.50/t. Copper fluctuated after testing recent support at $8,235/t; the metal closed at $8,370.50/t. Lead and zinc wavered but closed marginally unchanged at $2,052.50/t and $2,362/t, respectively. Tin softened after finding resistance at $29,000/t yesterday, settling at $28,342/t. With central bank decisions for this month pretty much priced in by the market, we expect focus to shift back to the fundamental picture, especially stimulus releases out of China. We think that good news out of the region will help prop up prices; however, until data out of the region becomes positive in a sustainable manner, we should continue to see soft landing in the metals space.
Oil futures gained some ground, with WTI and Brent edging higher to $72/bl and $77/bl. Gold futures jumped higher after the weaker-than-expected nonfarm payroll data however struggled to hold on to these gains, returning back to $1,930/oz; silver is now back above $23.00/oz.
All price data is from 07.07.2023 as of 17:30