US stocks opened higher today, echoing the record-high performance of European stocks, with the Euro Stoxx 50 approaching 4980. The European Central Bank (ECB) released a statement that aligned with expectations, maintaining the benchmark deposit rate at a record high of 4%. ECB President Lagarde adopted a cautious tone in her speech, emphasizing a data-driven approach to future monetary policy decisions. The focus remains on European negotiated wages, a critical factor that the chief economist has pointed out for assessing potential rate adjustments. The negotiated wage increase for Q4 2023 was reported at 4.46%, marking a decline from the 4.69% peak in Q3—the highest since records began in 2005. The ECB is closely monitoring these wage trends and has indicated that the Q1 2024 data, expected in May, will be pivotal in evaluating the possibility of interest rate reductions. Following the ECB's announcement, the USDEUR pair dropped to 0.915, reaching its lowest level since mid-January. The Federal Reserve and the ECB have demonstrated similar strategies in recent months, and we anticipate that the ECB will await the Fed's lead in easing monetary policy before taking similar action.
Base metals responded positively to the latest round of central bank statements, jumping higher day-on-day. The momentum was mostly driven in the early morning session as markets responded to the Fed's monetary policy statement announced yesterday. While Powell was cautious in his speech, the market took it as dovish, prompting the dollar and Treasury yields to soften. This appetite was further reinforced by the ECB's decision to keep the rates unchanged, prompting the dollar to contract further. As a result, aluminium jumped above the $2,200/t level, while copper neared the recent highs of $8,700/t, closing at $8,640.50/t. Lead and zinc both saw protracted buying pressures above $2,100/t and $2,500/t. Tin also jumped higher to the highs of $27,570/t. Nickel strengthened but struggled to break above the robust resistance of $17,935/t.
Gold's momentum has decelerated today after several days of gains that propelled the metal to record highs. Yellow metal modestly appreciated at $2,153/oz, while silver surged to test at $24.4/oz. Meanwhile, oil prices remained stable within their current range, with WTI and Brent crude priced at $78.8/bl and $82.9/bl, respectively.
All price data is from 07.03.2024 as of 17:30
