US stocks began the week on the front foot on rising prospects of the federal spending package, and a slowdown of COVID-19 cases encouraged a risk-on sentiment. The Treasury Secretary Janet Yellen stated the US could return to full employment by2022 if the package is enacted soon. The dollar softened, and the 30yr US Treasury yields breached 2% for a short period of time for the first time in almost a year, as markets saw inflation brake out to 2014 highs. Taiwan exports hit a record high in January, fuelled by rising demand for 5G computer chips ahead of the Chinese New Year. Meanwhile, data shows that the UK-EU freight traffic is back to 90% of usual levels, better than expected recovery after the Brexit red tape introduction early this year.
Activity on the LME was mixed today, with tin and zinc closing lower on the day. Aluminium prices were well supported and tested resistance at $2,040/t to close just off the highs at $2,028/t. Nickel was well bid, testing the resistance level of $18,190/t, before closing below at $18,167/t. Nickel cash to 3-months spread tightened up to -$35.00/t. Copper extended gains as US stimulus boosts sentiment, closing at $8,037/t. SHFE copper was also higher on the day, closing at CNY58,590/mt. Zinc was on the back foot, testing the key support level of $2,650/t to close at $2,651/t. Iron ore futures on a Singapore exchange rebounded on the back of a decline in supply in Australia’s main export hubs, closing at $996/mt.
Oil futures pointed to continued optimism in the market, with Brent seen piercing the $60/bl level. At the time of writing, WTI and Brent trade at $57.88/bl and $60.31/bl. Precious metals were all higher, with gold and silver seen higher at $1,836.47/oz and $27.54/oz respectively.