US stocks declined after a round of disappointing corporate earnings results. At the same time, initial jobless claims fell to 228,000 in the week ending July 15th, once again highlighting the resilience of the labour market and adding to the bets of a Fed hike later on in the year. The forward swaps are now pricing in another 10bps on top of the July hike. The dollar continued to gain ground back above 100, and the 10yr US Treasury yield is now back above 3.80%. Elsewhere, the euro-area economy revised its Q1 GDP results at 0.0% from -0.1%, suggesting that the bloc avoided a technical recession after all. Still, data provides little hope for the EU’s 2023 outlook, and we continue to see further weakness into the new year. In the meantime, euro area confidence increased by more than expected in July, as energy crisis fears seen earlier this year are subsiding.
Base metals edged higher today but lacked conviction during the day to break above the previous day’s resistance levels. Stronger yuan is likely to have supported today’s gains after the PBoC set its daily fixing at just under 7.15 and allowed companies to borrow more from overseas, encouraging more foreign capital inflows. This comes in line with news that suggest that Chinese authorities are considering easing home-buying restrictions in the country’s biggest cities. Still, gains were only marginal today. Aluminium tested prices above $2,200/t but struggled to break above this level and settled slightly above $2,201/t. Likewise, copper tried to breach the $8,500/t level before softening back into $8.485.50/t. Tin remained elevated above $28,000/t, closing at $28,715/t. Lead and zinc settled higher, at $2,107/t and $2,383.50/t, respectively, although lead gains were stronger.
WTI and Brent fluctuated around $74/bl and $78/bl. Gold and silver weakened slightly on the stronger dollar, trading at $1,967/oz and $24.84/oz, respectively.
All price data is from 20.07.2023 as of 17:30