US stocks continued to perform strongly, with the Dow Jones opening higher today, nearing a record high once again. The CPI report from the world's largest economy, published yesterday, continued to influence investors' expectations regarding the timing of the first interest rate hikes, pushing the 10-year US Treasury yield up to 4.18%. Forward swaps are now pricing in a 75% chance of a 25bps interest rate cut in June, slightly lower than at the beginning of the week. The dollar index saw a slight decline, settling at 102.9.
Copper rallied more than 3% today to $8,920/t, brought on by the news that Chinese smelters are considering cutting capacity in the face of declining processing fees. In our yesterday's comment, we mentioned that the speculative positioning for copper on the LME has been building, with the net reaching the 3-year high. We expect that markets were building bullish positions but were hesitant about pushing prices above the robust $8,700/t level. Today's news helped the market break out of the stagnant trading we have seen in recent months. While we expect today's rally to correct in the coming days, the trend support is likely to hold firm, prompting prices to strengthen in the coming months. The rest of the complex benefitted from the bullish narrative seen in copper, supported in part by a weaker dollar. Aluminium edged above the $2,250/t level. Lead and tin also jumped higher to $2,160/t and $28,160/t.
Precious metals made a comeback after yesterday's downturns. Amid lingering uncertainty about the initiation of monetary easing, investors are increasingly attracted to the safe-haven qualities of gold. The price of gold soared to $2,172/oz today, with silver also making a significant jump to $24.75/oz. News of a Russian refinery targeted by Ukrainian drones led to a rise in oil prices today, with WTI and Brent reaching the upper bound of their recent range at $79.1/bl and $83.4/bl, respectively.
All price data is from 13.03.2024 as of 17:30
