US stocks opened higher today. ADP report, which is considered to be a preliminary look at employment data before a more detailed release on Friday, pointed to a smaller-than-expected monthly number of hired workers in May. The reading stood at 152k, below expectations of 175k and much lower than the 192k recorded in April. The markets await unemployment data on Friday, which will paint a better picture of the current state of the US labour market. With growing expectations of the first Fed interest rate cut in September, the 10-year US Treasury yield continued declining today, trading at 4.3%. At the same time, the dollar appreciated against other major currencies and stood at 104.3.
Another day of softness was seen across the base metals market, as copper remained below the $10,000/t mark. While copper’s downside was marginal due to the support at $9,860/t holding firm, other metals faced stronger selling pressures. We believe the surge in copper prices led the entire market to trade above its fair value, and the recent decline is a result of a mean-reverting strategy. In particular, lead and zinc weakened to $2,2243/t and $2,925/t, respectively. Nickel is closing up to the $18,000/t level, where we believe the market will find a robust support level in the longer term.
Gold made up most of yesterday’s losses, trading at $2,348/oz. Silver edged slightly higher and stood at $29.7/oz. Oil remained mostly unchanged, with WTI and Brent crude at $73/bbl and $77.8/bbl, respectively.
All price data is from 05.06.2024 as of 17:30
