US stock market slumped today as market pessimism about economic recovery takes hold. The US economy contracted by a record 9.5% q/q, and personal spending fell to the lowest level of -34.6%, last seen 80 years ago, highlighting the extent of damage done by the global pandemic to the world’s largest economy. A separate report showed that the number of people filing for unemployment benefits increased to 1.43m for the second week straight. From the monetary policy perspective, the Fed has left the interest rates unchanged and vowed to use all possible tools to support economic recovery. The dollar softened to 93.31, and the 10yr yield on Treasuries fell to 0.5446%.
The LME prices were on the back foot today due to a deteriorating economic outlook. Nickel was particularly weak as protracted selling pressure triggered a close below a key support level of $13,730 at $13,726/t. Aluminium was well supported in the first half of the day; however, failed above $1,730/t and closed at $1,720/t. Copper prices traded lower and tested the $6,400/t support level before closing at $6,430.50/t. Zinc was range-bound and closed at $2,036.5/t. Lead and tin prices were softer today, closing at $1,873/t and $17,805/t respectively. Only zinc was higher on the day, closing at $2,286.50/t.
Oil futures slid the most this month on the weaker economic outlook, with WTI and Brent edging down to $39.96/bl and $42.65/bl respectively. Precious metal prices continued to soften, with gold and silver trading at $1,947.48/oz and $23.22/oz respectively.
