US stocks opened higher today. Macroeconomic data revealed that the US trade deficit widened in April due to a rise in imports. The trade balance decreased by nearly $6 billion, marking the largest one-month decline in a year and resulting in a deficit of $74.6 billion. A closer examination shows that consumer goods imports, excluding medical, dental and pharmaceutical products, fell by 5%, underscoring that households are shifting away from discretionary spending amid the challenging interest rate environment and sticky inflation. We expect the Fed to start monetary easing in September. Elsewhere, the ECB cut interest rates for the first time since 2019, bringing the key rate from 4% to 3.75%. The move was widely anticipated, having little impact on the euro. The European currency appreciated slightly against the sterling and remained broadly unchanged against the US dollar.
Downward pressure stalled today for the base metals complex, following days of strong weakness. Copper bounced back above the $10,000/t level, and the rest of the complex followed suit. In particular, zinc and nickel, which have been subject to stronger selling pressures, saw the momentum pause today to trade at $2,925/t and $18,531/t at the time of writing. Aluminium held firmly above the $2,600/t support level to edge higher to $2,647.50/t.
Precious metals rose today, with gold trading at $2,368/oz and silver at $30.76/oz. Oil prices also moved higher, with WTI and Brent crude at $74.8/bbl and $79.1/bbl, respectively.
All price data is from 06.06.2024 as of 17:30
