US stocks softened yesterday, with tech markets leading the decline, following the previous day’s strong gains. The Fed’s hawkishness supported the markets, and while full employment will be important in helping economic recovery, the officials have downplayed the goal somewhat and are likely to execute the three rate hikes without the need to reach full employment first. The dollar recovered yesterday’s losses, and the 10yr US Treasury yield softened further to 1.38%. Elsewhere, Russia raised its key interest rate once more to 8.5% in response to stronger than expected inflation.
Previous day's gains on the LME market have softened somewhat, but general bullishness persists, driven, in large, by the hawkish monetary policy outlook worldwide. Aluminium continued to strengthen on positive demand, closing higher at $2,724.50/t. Nickel was supported above $19,600/t and closed marginally higher at $19,648/t. Zinc, however, softened after jumping to a $3,480/t level on Thursday, closing at $3,387/t. Copper fell back below $9,450/t; the metal closed at $9,437/t. Overall, while trading remains thin closer to the Christmas period, we should continue to see heightened volatility with the rising number of omicron cases in major economies.
Oil futures declined for the first time in three days as the spread of omicron in major economies threatens demand outlook. WTI and Brent fell down to $71.00/bl and $73.54/bl. Precious metals were seen marginally stronger, with gold and silver edging up to $1,805.55/oz and $22.49/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 17.12.2021 as of 17:30