US stocks opened lower today after economic data revealed a decline in consumer optimism about the current and future state of the economy. The Conference Board's Consumer Confidence Index fell unexpectedly to 97 in April, down from 104.4 the previous month. This decline continues from the post-pandemic high of 135, bringing the index back to its historical average. Despite this, investors are still adjusting their expectations for the timing of the Federal Reserve's first interest rate cut, now anticipated in November. The dollar strengthened, hovering just below 106, while the 10-year US Treasury yield remained relatively stable at 4.65%. Elsewhere, the eurozone economy rebounded in the first quarter of 2024, supported by Germany's return to growth and a robust expansion in Spain. The eurozone's GDP grew more than expected at 0.3% QoQ, up from 0.0% in the final quarter of 2023. At the same time, the eurozone's headline CPI remained steady at 2.4% YoY, while the core CPI decreased from 2.9% YoY to 2.7% YoY. Market expectations are now pricing in almost a 90% chance of a 25bps rate cut by the ECB in June.
In China, the decline in home sales continued through April, though the pace of this downturn appears to be slowing, suggesting a potential stabilisation in the housing decline. April saw a 45% YoY drop in the value of new home sales, a slight improvement from the 46% decline recorded in March. Despite increased support from Chinese authorities at the end of last year aimed at bolstering the housing market, a lack of consumer confidence continues to weigh on the sector. However, policymakers remain committed to supporting the market, with a recent Politburo meeting announcing plans to explore further measures to address the country's excess housing inventory, indicating ongoing concern and attention to the housing market's challenges.
In the meantime, the risk-off sentiment strengthened today, reversing the gains that the base metals complex made yesterday. In particular, copper tested the $10,000/t level, fluctuating around it in the second half of the day, closing at $9,991/t. Aluminium remained broadly unchanged at $2,591.50/t. Zinc weakened back to $2,926/t, largely due to Nyrstar announcing the restart of its Budel smelter next month. While this news prompted a move lower today, we do not expect this to immediately alleviate the tightness of the existing concentrate supply.
Precious metals saw a downturn today, falling to levels not seen since the beginning of the month. Gold traded below the $2,300 mark, while silver dropped to $26.4/oz. Oil prices also declined, with WTI and Brent trading at $81.6/bl and $87.7/bl, respectively.
All price data is from 30.04.2024 as of 17:30
