US stocks have remained at elevated levels in anticipation of the FOMC decision, with investors keenly focused on the policymakers' remarks about the future direction of monetary policy. While the case for a September cut is now pencilled in, markets are uncertain about further cuts later in the year. As previously outlined in our reports, we do not foresee a shift in interest rates in November, largely due to the unpredictability associated with the US election period. Still, we believe that two cuts this year, with a pause in November, will give the Fed some breathing room to assess the impact of the first reduction while the assumption that the economy remains robust. Elsewhere, US PPI unexpectedly declined in May by the most in seven months, marking another signal that pricing pressures are easing enough for the central bank to begin the cutting cycle later this year.
Another day of marginal moves was seen across the base metals complex, with waning downside appetite, indicating a more stable support at current levels. Aluminium remained supported above the $2,500/t level, remaining firmly at $2,557/t. Copper was also struggling below $9,700/t, closing at $9,794.50/t at the time of writing. Nickel remained below $18,000/t as lead closed at $2,166/t.
Oil weakened today, as markets brace for US stockpiles and the FOMC meeting, prompting WTI and Brent to correct to $78/bl and $82/bl. Gold and silver were also slightly softer after the resistance levels at $2,340/oz and $30/oz held firm.
All price data is from 13.06.2024 as of 17:30
