US stocks opened slightly higher today, recovering from a decline at the end of the last trading day. The Leading Index, which is designed to forecast future economic activity by combining several individual indicators such as average weekly hours worked, new orders for consumer goods, building permits, and stock prices, came in at -0.6 for April, compared to -0.3 in March. Despite the negative figure, it is noteworthy that February 2024 was the only time in the last two years when the reading was above zero. The dollar index remained steady at 104.5, while the 10-year US Treasury yield edged up slightly to 4.4%. In Europe, the final CPI figures for April met expectations, with the headline CPI at 2.4% and core CPI at 2.7%, solidifying investors' expectations of the first ECB interest rate cut in June.
Base metals showed strong upward momentum once again today, led in large by copper moves. The metal jumped higher for the third straight day, surpassing the $10,500/t level as the LME contract mirrors the moves seen on Comex. Nickel also jumped higher above the $20,000/t level to $21,080/t. Supply tightness caught markets off-guard, prompting sharp moves on the upside in recent days; however, there is little fundamental narrative to suggest that prices should remain at these levels. While both copper and nickel stocks at the LME exchange are diminishing, the moves are marginal, and the cash to 3-month spreads remain in deep contango, suggesting little concern about longer-term metal availability. Still, the short position holders are likely to remain key in driving prices in the coming days. Elsewhere, lead and zinc followed suit, jumping up to $2,283.50/t and $3,031/t, respectively.
Precious metals saw gains today, with gold appreciating to $2,410/oz and silver surging to $30.72/oz, marking its highest level in a decade. Silver remains relatively undervalued compared to gold, with the current gold-to-silver ratio at about 80, compared to the 20-year average of 68, suggesting potential for further silver appreciation. Oil prices were mostly unchanged, with WTI trading at $79.4/bl and Brent at $83.5/bl.
All price data is from 17.05.2024 as of 17:30
