US stocks were seen marginally higher yesterday on the back of US consumer prices surging to the highest level of 6.8%, a level not seen in nearly 40 years, highlighting the persistency of rising inflationary pressures. The key index to watch in the next couple of months will be wages and whether real wage growth continues to soften month-on-month. The inflation figure is likely to confirm the quickening of tapering coming from the Fed, with the next meeting scheduled next week. US sentiment, in the meantime, rose in December by more than expected; this is most likely to be driven by a recovery from the previous month when sentiment hit the decade lows. The dollar and the 10yr US Treasury yield both softened.
The metals complex steadied in the first half of the day after yesterday’s softness. Overall, the markets continue to remain cautious about the omicron spread as well as constriction sector in China, and this should add volatility to the markets going into next week. Aluminium softened yesterday, breaking below the support level of $2,620/t before closing lower at $2,606.50/t. Copper fluctuated, but closed lower on the day at $9,506.50/t; after the close, the metal broke below the support at $9,500/t; cash to 3-month spread has softened further into $0.40/t, the closest level to a contango since September. Likewise, nickel closed lower at $19,746/t. Lead shot up in the second half of the day, but not enough to offset the earlier losses and closed at $2,284/t.
Despite oil futures being mixed yesterday, with WTI and Brent edging up to $71.19/bl and $74.60/bl. Precious metals shot up in the second half of the day, following the inflationary data; gold and silver traded at $1,784.43/oz and $22.17/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 01.12.2021 as of 17:30