US stocks recovered some of the lost ground this afternoon following numerous data releases from the US, and President Biden suggesting he could set corporation tax below 28%. Economic data in the US saw the ADP employment change beat expectations at 978,000 vs 650,000. Initial jobless claims were 385,000 with continuing jobless claims at 3,771,000 as of May 22nd. The labour market continues to struggle due to a lack of workers, benefit schemes are still very generous, lowering the incentive to work, we expect this to improve as states start to reduce unemployment schemes in June and July. The USD strengthened today, exerting downward pressure on commodities, with the US 10 yr yield rallied to 1.62. Elsewhere, European stocks continue to outperform US stocks. Risk appetite in the bloc is strong as data improves, the ECB remain dovish, and vaccination rates quash covid cases.
Activity on the LME saw heavy selling pressure as Fed policymakers spoke of tapering bond buying. Zinc sold off the most, breaking through support at $3,000 to close at $2,984.50/t. Copper was next in line breaking through $10,000/t to close at $9,788/t, with the cash to 3month spread at $18.75/t contango. Lead failed above $2,215/t and closed on the back foot at $2,173/t. Nickel closed at $17,891/t with the spread at $29.50/t contango. Tin closed at $29,986/t but has recovered back above $30,000/t after the close. Ali lost the least ground and closed down $39 at $2,405/t, with the cast to a 3-month spread at $20.41/t. The SGX 62% Fe July contact softened marginally to $196.5/t
Energy prices failed to hold onto the highs for today, with WTI and Brent trading at $68.85/bl and $71.11/bl. Precious metals were also weaker today, silver is down 2.95% at the time of writing at $27.34/oz, gold traded through $1,900/oz to $1,870/oz where the market is finding support.
All price data is from 03.06.2021 as of 17:30