US stocks rose at the opening today, kicking off a week packed with economic data releases. Investors are particularly focused on the PCE index due on Friday, which will provide insights into the possible timing of the Fed’s first interest rate cut. Currently, forward swaps are pricing in nearly a 75% chance of a rate cut in September. Markets are already anticipating two 25bps cuts; any indication that a September cut is likely will align with market expectations. Conversely, any hint away from a cut could significantly increase market volatility. The dollar index fell back below 105.5, while the 10-year US Treasury yield remained mostly unchanged at 4.25%.
Another quiet start for base metals trading this week, with marginal moves across the complex. Copper edged lower to test the support level at $9,650/t; however, this level held firm, prompting the metals to come back to close at $9,661/t. Investors have unwound their positions in recent weeks, and as we settle into a summer market, volumes and volatility will likely soften. We believe that the market still has more room on the upside, but the timing is now extended, given a defensive market. We expect metals to remain in range in the near term. Other metals followed copper’s trend. Aluminium and nickel tested their respective support levels at $2,500/t and $17,000/t. Lead and zinc were rangebound.
Precious metals bounced back slightly after Friday’s losses. Gold appreciated above its 50-day moving average, standing at $2,333/oz, while silver hovered around the $29.6/oz level. Oil prices also rebounded after Friday’s losses, with WTI and Brent crude trading at $81.1/bbl and $85.5/bbl, respectively.
All price data is from 24.06.2024 as of 17:30
