US stocks closed the week on the back foot, taking back most of yesterday’s gains. US employment costs rose by more than forecast in Q4 2020, as worker pay increases accelerated. Meanwhile, US household spending fell for the second time in December, even as income rose with the pandemic bill coming in last month. The dollar weakened down to 90.452, and the 10yr US Treasuries yield strengthened up to 1.0791%. Elsewhere, Hong Kong economy contracted by a record 6.1% in 2020, falling by 3% in Q4. On the vaccine front, J&J one-shot vaccine shows 66% efficacy against the virus, raising hopes of another player in the market soon.
Metals on the LME came under moderate selling pressure today, with tin the worst affected, closing at $22,779/t. Protracted selling pressure in the second half of the day and a rejection of prices above $18,000/t caused nickel prices to close lower at $17,691/t. Lead was next in line as prices struggled above $2,050/t to close $2,024/t. Aluminium managed to find support at $1,975/t and closed at $1,977.50/t, with the cash to 3-month spread at $0.50/t. Copper tested support at $7,800/t to close at $7,856/t. Zinc was seen lower today, as it headed for its biggest monthly decline since February after rising stockpiles, closing at $2,579.50/t.
Oil futures were stronger today on the back of vaccine breakthrough. At the time of writing WTI and Brent trade at $52.50/bl and $55.99/bl. Precious metals strengthened today, with silver rallying by more than 3%, up to $27.33/oz, while gold is seen at $1,860.45/oz.