US stocks strengthened today. The markets are trying to gauge the timing of the first interest rate cuts, closely following all economic data releases that could impact the Fed’s decision. Tomorrow’s CPI print will likely bring more volatility, shaping markets’ expectations regarding the central bank’s actions going forward. In recent days, the probability of the first interest rate cut in March increased to more than 70%. US dollar edged slightly lower and stood at 102.40, which we believe is a stable level until the next Fed’s meeting at the end of the month. The 10yr US Treasury yield fell, testing 3.98% but came back up and stood at 4.00%.
Metals remained broadly unchanged today, given little change in macroeconomic indicators ahead of the CPI print tomorrow. We expect metals' volatility to increase regardless of whether the inflation index will fall in line with expectations or not. With all eyes on the Fed and the upcoming cutting cycle, markets are paying close attention to the inflation print to help reduce the uncertainty on the timing and scale of monetary policy easing. Aluminium held below the $2,250/t level at $2,234/t, while copper traded at $8,331.50/t. A lower-than-expected inflation print would help prices to breach the near-term resistance level; however, we do not expect this move to be sustainable, as near-term momentum remains on a marginal downside for both aluminium and copper, respectively. Lead, once again, struggled below the $2,050/t, settling higher at $2,083.50/t. Zinc edged lower to close at $2,495.5/t.
Precious metals fluctuated today. Gold tested the $2040/oz. level and fell back to $2025/oz., while silver fell to $22.87/oz. Oil prices remained mostly unchanged with WTI and Brent at $72.37/bl. and $77.59/bl., respectively.
All price data is from 10.01.2024 as of 17:30