US stocks softened yesterday, driven mostly by technology firms, as markets assessed the consequences of the renewed term for Powell and what it means for the monetary policy outlook. As a result, US 10yr Treasury yields jumped up to 1.666%, while 2yr broke above 0.6% for the first time since March last year when the yields sold off amidst the peak of the pandemic. The dollar softened marginally, and the previous day’s gains cooled somewhat as it found resistance at 96.60 – a July 2020 high. The lira weakened by 15% yesterday after President Erdogan defended the pursuit of lower interest rates to boost economic growth. IHS Markit flash composite, a gauge of business activity, slipped to 56.5; while expansionary, manufacturers seem to struggle to cope with the continued supply chain disruptions. We await FOMC minutes tomorrow, alongside GDP and labour data, which are forecast to recover from the previous data release.
Metals prices consolidated yesterday as activity on the LME was subdued. Aluminium fluctuated for most of the day before falling below the support level of $2,670/t to close at $2,668.50/t. Likewise copper whipsaw between gains and losses as it tested resistance $9,792/t before closing lower at $9,710.50/t. Zinc lost ground, falling below the support level of $3,300/t, and closed at $3,301/t. Nickel closed at $20,349/t. The easing of property regulation has caused steel and iron ore to rally as steel demand is expected to improve; SGX Iron ore has rallied back to $97.8/t.
Oil futures strengthened after the US, alongside countries such as China and India, agreed to tap into 50m barrels of crude reserves to help mute the prices. WTI and Brent traded at $78.53/bl and $82.07/bl. Gold continued to sell off, offsetting gains made in the first half of the month after Jerome Powell was selected for a second term. All precious metals were seen lower on the day, with gold and silver falling to $1,782.62/oz and $23.34/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 23.11.2021 as of 17:30