US stocks opened higher today following better-than-expected retail sales data. Although retail sales were unchanged in June, with a drop in auto dealership receipts offset by strength elsewhere, the dollar index rebounded slightly, trading at 104.4. The 10-year US Treasury yield remained mostly unchanged around the 4.2% level. Today's retail sales data did not alter expectations that the Fed might start cutting interest rates in September amid cooling inflation.
Base metals prices softened again today due to a less optimistic outlook for China, as the nation is hosting the Third Plenum. Market participants do not anticipate any significant announcements from speakers. Following the release of Q2 data from China over the weekend, confidence in the revival of the construction sector remains low, and it is unlikely that any potential stimulus measures will bring about long-term fundamental changes to the segment. The decline was most pronounced in aluminium today, which continued to break lower, testing a robust support level at $2,400/t; we believe a breach of this level could prompt further declines. Other declines were less pronounced. Copper softened slightly to $9,663.50/t, as nickel is carefully testing prices below the $17,000/t level.
Precious metals are gaining momentum as the market becomes increasingly certain that the end of this quarter will bring the first interest rate cuts from the Fed. Gold reached record levels today, trading at $2,456/oz, while silver increased to $31.3/oz. Conversely, oil prices softened, with WTI and Brent crude at $81/bbl and $84/bbl, respectively.
All price data is from 16.07.2024 as of 17:30