US stocks pulled back yesterday over concerns of being overvalued. Meanwhile, the Democrats begin the final push towards Biden’s $1.9tr stimulus bill this week before the jobless benefits expire. The dollar softened into 90.056. The 10yr US Treasury yield was little changed, while the 5-30yr yield gap touched the highest level in more than 5 years. Meanwhile, Boris Johnson laid out the plan out of the pandemic, with completely all restrictions being lifted by June. This comes at a time when COVID-19 vaccines in the UK show positive signs of containing the spread of the virus, by reducing the risk of infections by more than 70% after the first dose alone.
LME base metals rallied as investors priced in stronger growth and inflation as the number of vaccinations continues to rise. Only nickel and lead closed lower on the day at $19,493/t and $2,152/t respectively. Copper breached $9,000/t for the first time in 9 years, as expectations of tight supply relative to future demand continue to drive prices higher; the metal closed at $9,097/t; the cash to 3-month spread widened out back to $35.50/t, from rising sharply before to $49.50/t. Aluminium prices were well supported in the second half of the day and tested resistance at $2,177/t and closed just off the highs at $2,166.50/t; the cash to 3-month spread tightened to -$12.25/t. Tin was well bid, testing the resistance level of $27,000/t, before closing below at $26,615/t. Zinc prices remained supported above $2,860/t before closing at $2,899/t.
Oil futures surged as weaker dollar supported the prices. At the time of writing, WTI and Brent trade at $62.52/bl and $66.19/bl. Precious metals were all seen higher, with gold and silver edging up to $1,811.71/oz and $27.97/oz.
*All price data is from 22.02.2021 as of 17:30