US stocks started on the front foot ahead of another week of corporate earnings results. The focus turns to BOE, which is expected to hike interest rates to 0.5% on Thursday; we expect that rates will reach 1.0% by the end of this year. German inflation slowed in January, as it grew by 5.1% y/y, down from 5.7% in the previous month, confirming the ECB’s view that price growth will ease noticeably in 2022. Euro area GDP rose by 0.3% in Q4, driven in large by the contraction seen in Germany as the omicron-led wave urged economies to introduce tough lockdown restrictions. The dollar softened, and the 10yr US Treasury yield gained ground but struggled to break above 1.80%. Chinese manufacturing slowed in January as COVID restriction measures were reintroduced in crucial manufacturing regions.
The sentiment on the LME was softer today, with most metals losing ground except tin and copper. Tin was bid through $42,000/t to close at $43,023/t; the cash to 3-month spread is still in a backwardation at $505/t. Copper consolidated and traded a narrow range to close at $9,506/t. Aluminium prices were sold off today and tested appetite around $3,000/t, this level held firm, and the metal closed at $3,021/t. Zinc and lead also lost ground, settling at $3,586/t and $2,244.50/t, respectively.
Oil futures strengthened, closing the month by up 18%, on a robust demand outlook driving the price action. WTI and Brent traded at $87.26/bl and $91.16/bl. Precious metals were primarily range-bound.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 31.01.2022 as of 17:30
