US stocks began the week on the back foot, led by technology shares, as soaring commodity prices raised inflation concerns once again. The dollar was softer, and the 10yr Treasury yield steadied ahead of a busy auction week. Meanwhile, 5yr Treasury inflation breakeven rate, a gauge of the inflation outlook, has climbed to the levels last seen in 2006. Elsewhere, the pound climbed to a higher level since February after the Sottish election pushed back the risk of a near-term vote on independence. Chinse inflation data is out today and is expected to jump to 1.0% y/y in April, vs 0.4% in the previous month.
Metals on the LME surged higher in the first half of the day before selling off later on to close in the negative territory. Protracted selling pressure in the second half of the day and a rejection of prices above $18,200/t caused nickel prices to close lower at $17,762/t. Lead was next in line as prices struggled above $2,260/t to close $2,212.50/t. Aluminium managed to find support at $2,505/t and closed at $2,531/t, with the cash to 3-month spread at -$12.15/t. Copper jumped to a record high of $10,747/t before closing lower at $10,382/t. Zinc was seen lower today, closing at $2,991.50/t. SGX Iron ore futures surged by more than 12%, to close at $222.40/mt.
Oil futures surged, with Brent rising to the May 2018 highs of $69.20/bl after a cyberattack forced closures of the US pipeline. WTI remained broadly unchanged at $64.82/bl. The OPEC oil market report is out today, with releases focussing on global demand outlook and production estimates. Precious metals were seen higher, with gold and silver edging up to higher $1,840.23/bl and $27.45/oz, respectively.
All price data is from 10.05.2021 as of 17:30