US stocks followed European shares higher after softer CPI reading from the UK boosted market sentiment. UK pricing pressures cooled by more than expected in June, growing by 7.9% y/y after energy prices continued to ease. That caused the market to reprice its bets towards the BOE hiking cycle, with 88bps seen until the end of the year vs 110bps seen earlier this week. The pound fell below 1.30, while the dollar edged back above 100. This news has offset some of the pessimism seen in the real estate sector. At the same time, the euro area core inflation reading accelerated more than anticipated, growing at 5.5%, highlighting the core prices might continue to follow a different trajectory in comparison to the headline reading, remaining upwardly sticky. In particular, the market is watching out for the labour market to give up some of its strength to ease some of the pressures on wage growth.
Another day of marginal declines was seen across the base metals complex today. Aluminium continues to rapidly give up last week’s gains, falling back below the $2,200/t level to $2,1890.50/t. Likewise, copper tested the $8,419/t support today, but markets rejected prices below this level, and the metal closed at $8,429/t. Nickel remained broadly unchanged at $20,907/t. Lead and zinc softened into the longer-term support levels to close at $2,085.50/t and $2,359.50/t, respectively.
Oil futures edged higher to $76/bl and $80/bl for WTI and Brent, respectively. Gold and silver remained elevated at $1,974/o and $25.15/oz.
All price data is from 19.07.2023 as of 17:30