US stocks opened lower today following the release of CPI data that aligned with expectations. Headline inflation softened to 2.5% YoY in August, down from 2.9% in July, while core CPI remained steady at 3.2%. Despite a drop in energy prices, monthly inflation rose by 0.2%, driven by a surge in housing costs and services. US home prices have been climbing in recent years due to strong demand from millennials and investors, a shortage of available homes, limited new construction, high mortgage rates, and fewer existing homes entering the market. Markets have adjusted their expectations, now pricing in a 25bps rate cut from the Fed in September, down from earlier bets of a 50bps cut. The dollar index jumped, testing 101.8, while the 10-year Treasury yield edged lower, settling at 3.63%.
Base metals complex opened on the front foot today, given a softer dollar move following from the US Presidential debate between Trump and Harris. Since markets did not have a major reaction post-debate, the sentiment calmed, and the upside waned. Aluminium and copper remained broadly unchanged at $2,370.50/t and $9,090.50/t, respectively. Nickel jumped above the $16,000/t level to $16,112/t. The rest of the complex followed suit.
Gold fluctuated, hovering around $2,515/oz, while silver followed the upward trend in base metals, trading at $28.5/oz. Oil prices remained largely flat, with WTI and Brent crude at $66.6/bbl and $69.8/bbl, respectively. Combined net longs for Brent and WTI are at their lowest level on record, reflecting bearish sentiment in the oil market.
All price data is from 11.09.2024 as of 17:30
