US stocks opened higher today, buoyed by growing investor optimism following last week's economic data, which indicated a resilient consumer sector. The forthcoming GDP report will shed light on the overall performance of the world's largest economy in the final quarter of 2023. Additionally, the PMI data is expected to provide a clearer view of private sector activity in the U.S. and other major economies. Meanwhile, the dollar remained range-bound, trading around the 103.25 level, and the US 10-year Treasury yield dropped to 4.09%, still above this month's average.
Moderate downside was seen across the base metals space today, continuing from last week’s trend. Both aluminium and copper posted losses today, trading at $2,159/t and $8,349.5/t, respectively. Chinese economy and a continued drift in its consumption performance are weighing on metals prices, and we believe the nation will remain key in driving the general trend of the whole complex, most likely resulting in rangebound moves in the meantime. The momentum of the day will be influenced by monetary policy expectations. As the dollar is expected to remain strong for most of this quarter, base metals will likely trade at the lower end of the trading range. However, lead may have a different narrative on the upside as shorts are building, stocks are coming off, and spreads are tightening. Indeed, lead continued on the upside today, trading at $2,125/t.
Elevated Treasury yields continue to serve as headwinds for precious metals, suppressing the performance of gold and silver. The yellow metal declined today, standing at $2,023.40/oz, while silver dipped below $22.20/oz. A Ukrainian drone strike near a major Russian oil export terminal has raised fears of potential supply disruptions, driving prices higher. Consequently, both WTI and Brent crude oil prices saw an increase, standing at $74.83/bl and $79.73/bl, respectively.
All price data is from 22.01.2024 as of 17:30