US stocks opened lower today, with investor sentiment tempered by expectations surrounding central bank policies. The focus is particularly sharp on the ECB which is now expected to initiate monetary easing ahead of the Fed following the robust PMI figures for the US, contrasting with continued contraction in factory activity in the Eurozone. The market's forward swaps are currently pricing in a 60% chance of a Fed rate cut in June, compared to a 100% likelihood of an ECB cut. The dollar showed fluctuations, momentarily touching the 105 mark before falling back to 104.8. At the same time, the 10yr US Treasury yield rose, reaching 4.37%.
Aluminium prices strengthened today, propelled by a combination of factors that collectively prompted prices to breach the $2,300/t level to $2,380/t. A comparatively softer monetary policy outlook in Europe to the US, coupled with an ongoing drought in Yunnan affecting the resumption of idled capacity, has provided a necessary boost for aluminium as it enters its peak consumption season. There has been a disconnect between aluminium prices and macro- and fundamental-related factors, and we expect that technical levels will mostly prompt further moves. The $2,400/t is likely to hold firm in the meantime, but there is little impetus on the downside. Copper also improved but struggled above the $9,000/t level, closing at $8,991/t. Lead and zinc held firm at $2,020.50/t and $2,479.50/t, respectively.
Precious metals saw an uptick, with gold prices holding firmly at record highs to $2,252.5/oz and silver to $25.7/oz. Oil prices remained at the upper end of their recent range, with WTI at $85/bl and Brent crude at $88.8/bl.
All price data is from 02.04.2024 as of 17:30