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US stocks strengthened as the corporate earnings results were released today, shifting market attention from the Treasury yields. US existing-home sales dropped for the first time in four months in December, driven in large by low housing inventory. US initial jobless claims climbed to a 3-month high of 286,000 as the omicron variant meant more layoffs in the service sector. On the other hand, the Philadelphia Fed survey doubled market expectations in December, a contrast to disappointing survey results from NY state earlier this week. The dollar and the 10yr US Treasury yield both were range-bound. The geopolitical tensions between Russia and Ukraine continue to mount, bringing into question the scale and extent of sanctions that could be introduced by the US and Europe. Meanwhile. China cut borrowing costs once again today, down by 10bps to 3.7%, as the central bank pledged more easing is to come.

Metals prices continued to rally after a strong overnight session in China for nickel and tin particularly strong. Nickel prices rallied to test $24,000/t and close at $23,795/t. Cash to 3-month spread is at $330/t, but we continue to see a squeeze on SHFE and now the reverse arb. Copper prices rallied through $10,000/t once again as the PBOC cut rates to close at $9,900/t. Aluminium was also higher today, closing at $3,111/t. Lead was more range-bound as it found support at $2,350/t to close higher at $2,349.50/t.

Oil futures hovered near the 2014 highs on the back of a modest increase in crude inventories. WTI and Brent traded at $87.65/bl and $89.39/bl. Gold was unchanged, while silver continued to break higher, now at $24.59/oz.

For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.

All price data is from 20.01.2022 as of 17:30


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