The US market returned today to face the dramatic escalation of the crisis after Russia recognised two self-proclaimed republics near the border in Ukraine. The EU and the UK proposed their initial packages to sanction Russia, and Germany has put the Nord Stream 2 pipeline on hold, causing European natural gas prices to jump 9% on the day. The dollar softened, and the 10yr US Treasury yield rallied even after opening at 1.86%. In macro news, US service and manufacturing PMIs surprised on the upside, with the rebound in the service industry attributed to recovery from the omicron wave. Meanwhile, US consumer confidence fell to September lows in February, as decade-high inflation continues to erode financial prospects. Elsewhere, China boosted its short-term liquidity injection after the Lunar New Year holidays, which should provide some support for the economy in the meantime.
LME base metals fluctuated but closed the day marginally higher on the built-up tensions in Ukraine and subsequent sanctions imposed on Russia. Nickel continued its steady incline, pushing the metal to test $25,135/t today before closing at $24,558/t. Aluminium’s intraday performance reached $3,380/t, the highest level since 2008; the metal closed at $3,303/t, with cash to 3-month spread at the highest level since 2018 at $47.00/t. Zinc shot up to breach $3,600/t to close near the highs at $3,605/t. Iron ore futures resumed declines, falling below $140/mt once again, as markets assessed the impact of both the price-cooling measures in the form of stock release as well as a ramp-up of production coming from China.
Oil futures rallied, with WTI and Brent jumping to $92.75/bl and $96.65/bl. Gold dipped above $1,900/oz for the first time in 10 months, as investors awaited what sanctions would be imposed on Russia. Silver jumped to $24.26/bl.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 22.02.2022 as of 17:30
