US stocks opened higher today following GDP data that pointed to higher-than-expected growth in the fourth quarter of 2023 at 3.3% QoQ, primarily due to robust consumer spending. The dollar rose to 103.56 against other major currencies while the 10-year US Treasury yield gave back yesterday's gains and stood at 4.12%. Given strong economic performance and growing divergence from other major economies, we expect the dollar to remain elevated in the coming months. We see little downside to the greenback's performance. Moreover, as there is a lack of liquidity across riskier assets, the dollar creates another avenue for those who wish to hold a safe bet in their portfolios. The Fed's preferred gauge of inflation - the Personal Consumption Expenditure (PCE) index – will be closely watched by investors tomorrow to help them form expectations for the first interest rate cuts.
Today's macro upside struggled to push metal prices significantly higher, given the recent day's rally. Aluminium once again struggled above $2,250/t, trading at $2,238/t. In comparison to the seasonal performance of 2022 and 2023, aluminium has opened on the back foot but is still in line with the longer-term average. A balanced global market provides little incentive for the metal to trade outside of the current ranges, and we expect sideways moves in the near term. Likewise, copper tested the $8,600/t level before rejecting prices above it and coming down to $8,566/t. Lead and zinc saw upside momentum stall, with prices trading at $2,142/t and $2,583.50/t, respectively.
old made up some of yesterday's losses, standing at $2020.8/oz, while silver edged higher to $22.86/oz. Oil continued on the upside, with WTI and Brent crude touching an 8-week high, trading at $76.27/bl and $81.24/bl, respectively.
All price data is from 25.01.2024 as of 17:30