US stocks edged slightly higher today, hovering near record highs, as markets digested the mix of inflation data and monetary policy statements. In particular, US producer prices increased by more than expected in April, marking an increase of 0.5% MoM and up 2.2% YoY, the biggest increase since April 2023. This figure is particularly significant as it provides insight into tomorrow's CPI data, given that many of its components are also used in the PCE index calculation. Despite this increase, the core inflation measure remained stable. At the same time, Powell reiterated that he expects that the Fed will keep interest rates higher for longer, as inflation is proving stickier than originally expected. Still, the forward swaps reinforced their conviction for more cuts this year. As a result, the dollar weakened below the 105 mark, and the 10-year US Treasury yield remained broadly unchanged.
Another day of subdued moves was seen across the base metals complex as metals opened on the front foot but struggled to breach new highs. In particular, copper opened above the $10,200/t level, but appetite faded above the $10,250/t level, causing prices to close at $10,114/t. Aluminium continued to edge marginally lower to $2,551/t. Likewise, lead and zinc were capped at $2,265/t and $3,000/t, respectively.
Macro kept oil prices subdued, prompting WTI and Brent to correct to $78/bl and $82/bl. Gold and silver remained elevated at $2,350/oz and $28.50/oz, respectively.
All price data is from 14.05.2024 as of 17:30
