US stocks opened higher today, buoyed by positive economic data. Consumer spending, which accounts for over two-thirds of US economic activity, rose by 0.5% MoM in July, up from 0.3% MoM in June. The increase was broad-based, with expenditures on motor vehicles and parts leading to the gains in both goods and services. The Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, remained steady at 2.5% YoY in July, suggesting that inflation pressures are stabilising but still persistently above the Fed’s 2% target. The dollar index hovered around the 101.5 level, while the 10-year US Treasury yield remained relatively unchanged at 3.87%.
In the Eurozone, CPI data met expectations, with the headline inflation rate softening to 2.2% YoY in August from 2.6% YoY in July. Core CPI also eased slightly, dropping from 2.9% YoY to 2.8% YoY. Additionally, the unemployment rate in July edged down to 6.4% YoY from 6.5% YoY in June. These data points have solidified market expectations, now pricing in a 100% probability that the ECB will implement a 25bps rate cut in September.
Another day of lacklustre moves among the base metals complex today as markets struggled to gain momentum out of current trading ranges. Copper held firmly above $9,200/t once again, suggesting little appetite below this level. Aluminium edged lower into $2,447/t. The rest of the complex followed suit, remaining broadly unchanged day-on-day. Nickel continued to struggle above the $17,000/t level, which we see as crucial as it is a cost of nickel production; a break above this level incentivises miners to restart some of the idled production.
Gold gave back yesterday’s gains, trading at $2,508/oz, while silver fell below the $29.0/oz mark, standing at $28.7/oz at the time of writing. Meanwhile, news of OPEC’s planned output hike starting in October pressured oil prices, with WTI and Brent crude trading lower at $73.7/bbl and $78.8/bbl, respectively.
All price data is from 30.08.2024 as of 17:30
