Stocks rallied today amid investors optimism surrounding headline economic data, and as a result, improved earnings. The VIX has declined from last week's highs of 27.59 to 19.78, this is below the YTD average of 21.53. Housing data in the US was marginally softer than expectations, with housing starts at 1.569m, down 9.5% m/m, and building permits at 1.760m, both for April. The dollar index broke back below 90 and trades at 89.90 at the time of writing, the US 10 year yield trades at 1.67%, while the UK and German 10 yrs trade at 0.866% and -0.105%, respectively. Data in Europe confirmed a decline in employment for Q1 by 2.1%, with GDP at -1.8% y/y, and -0.6% Q/Q for Q1. The trade balance for March 13bn in March, down from 18.4bn in February.
On the LME, all prices were higher except for aluminium which witnessed some selling pressure. Ali failed above $2,500/t which prompted a close on $2,478/t, the cash to 3-month spread settled at $30.25/t. Tin was well supported today and broke back above $30,0000/t to close at $30,595/t, the spread remains in a deep backwardation at $2,475/t. Appetite for Zinc prompted a test of $3,110/t, but prices failed above this level and we closed at $3,057/t. Lead was bid towards $2,205/t, this triggered a close at $2,228.5/t. Copper found support this afternoon to test appetite at $10,525/t but the market weakened into the close to $10,405/t. Copper has weakened after the LME close and the cash to 3-month spread remains in contango at $28.75/t.
Energy markets have sold off this afternoon after Brent tested $70/bl earlier today, following a report that there has been progress on the Iran Nuclear deal. Brent trades at $67.7/bl, down 2.4%, with WTI at $64.5/bl. Silver failed to hold onto the day's highs and trades at $28.20/oz at the time of writing, with gold unchanged at $1,866/oz ahead of the Fed minutes tomorrow.
All price data is from 18.05.2021 as of 17:30
