US stocks fluctuated today. April's Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, rose 2.7% YoY, matching the advance from February, indicating persistent inflationary pressures. The data aligned with expectations, leading investors—who have grown accustomed to inflationary pressures exceeding forecasts—to increase their bets on the first interest rate cut in September. Forward swaps are now pricing in more than a 60% chance of this cut. Following the release, the 10-year US Treasury yield plunged below 4.5%, while the dollar traded at 104.6. In the Eurozone, the Consumer Price Index (CPI) released today showed inflation rising more than expected in May, reaching 2.6% YoY. This unexpected increase hasn't changed investor expectations for the first ECB interest rate cut in June, but it may strengthen the case for a pause in July and a slower pace of rate reductions in the following months.
Today, the base metals market experienced another day marked by weakness, as selling pressure ramped up in the latter half of the day. Initially, metal prices showed fluctuations, largely unaffected by macroeconomic news from Europe and the US, as they tested key support levels. However, once these levels were breached, we saw a significant downward correction. Copper fell below the $10,100/t level to close at $10,040/t. The $10,000/t support level is crucial and breaching it could lead to a more pronounced correction. Looking ahead, we anticipate a slight softness at the beginning of next week as the market assesses appetite for lower prices. Aluminium was also lower, breaking below the $2,700/t mark to close at $2,652.50/t. Lead and zinc softened into $2,273/t and $2,969.50/t, respectively.
Precious metals remained broadly unchanged today, with gold trading around $2,332/oz and silver at $30.8/oz. Oil prices softened slightly, with WTI at $77.4/bbl and Brent crude at $81.7/bbl.
All price data is from 31.05.2024 as of 17:30
