US stocks opened higher despite economic data surprising on the downside, as markets reaffirmed their stance on the July hike being the last one of this hiking cycle. The forward swaps are now pricing in 23bps next week and a peak rate of 5.40% by November. Still, the outlook for the remainder of the year remains uncertain, and July meeting minutes will be key in driving market sentiment into the year-end. Meanwhile, both retail sales and industrial production data came in below market expectations, at 0.2% and -0.5% m/m, respectively. US homebuilder sentiment rose to the highest level in 13 months in July as buyers continue to purchase new construction amid tightening housing supply. The dollar remained below 100, and the 10yr US Treasury yield is now at 3.77%
Another day of moderate declines was seen across the base metals complex today and prices continued to give up last week’s gains. China’s disappointing data release on Monday has prompted economists to downgrade their GDP forecasts for 2023, citing limited government stimulus response as a major weakness for the economy. The central bank stated that they have enough room to ease monetary policy if needed and hinted at possible adjustments to the RRR for banks and further targeted easing of property controls. Right now, the outlook for the economy is weighing on Chinese assets and, in turn, base metals. Aluminium broke below the $2,250/t level today, as a lack of strong fundamental strength brought the metal back to the longer-term range to close at $2,203.50/t. Copper broke below $8,500/t to close at $8,473/t. Lead and zinc edged lower to close at $2,096/t and $2,395.50/t, respectively.
Oil futures jumped higher after Russian exports slowed; WTI and Brent jumped back to $75/bl and $79/bl. Gold and silver continued to gain footing, now trading at $1,978/oz and $25.11/oz, respectively.
All price data is from 18.07.2023 as of 17:30
