Global equities drifted lower today, gripped by concerns over political uncertainty in France, driving the risk-off sentiment across the board. The nation's equity and bond market deteriorated sharply, spiking fears about a potential euro crisis. The premium to own the 10-year OATs over German bunds headed for the biggest weekly jump on record. Despite the Fed's Reserve's decision yesterday to leave interest rates unchanged and to lower its projection to just one rate cut this year, the market's macroeconomic reaction was subdued. Forward swaps are still anticipating 50bps in cuts within the year. The dollar rallied back above 105 to 105.80, while the 10-year yield edged lower to 4.2%.
The base metals complex softened today, pulled down by a stronger dollar, causing futures to test the current support levels. Recent macroeconomic pressures have dampened the performance of the complex; however, the outlook appears to be slowly turning more positive, and we expect to see slight gains in the near term. In the meantime, aluminium remained supported above the $2,500/t level as copper tested the $9,680/t level, closing slightly above it at $9,741.50/t. Lead continued to soften, breaking below the $2,150/t. Nickel closed above the $17,500/t level, which we see as a fundamental support level.
WTI and Brent edged higher to $78/bl and $82/bl, erasing the previous day's losses. Meanwhile, a risk-off sentiment in Europe prompted investors to flee to safe havens, strengthening gold and silver to $2,329/oz and $29.10/oz, respectively.
All price data is from 14.06.2024 as of 17:30