US stocks retreated as the market assessed the impact of recent bounds of volatility on the Fed’s decision this month. Fed Chair Jerome Powell stated that he is uncertain what the impact of sanctions would be, but said that there is no threat of immediate price rises in the meantime. US service sector fell in February, down to a one-year low of 56.5, as orders softened along with the business activity. US initial jobless claims continued to decline, falling by 18,000 to the lowest level since the start of the year. The dollar continues to advance as it is about to breach 98.00, and the 10yr US Treasury yield was marginally unchanged. The US mortgage rate, however, fell for the second consecutive week as the market digested the prospects in Ukraine. We watch out for nonfarm payrolls tomorrow that is forecast to have declined in February.
Metals on the LME market kept up this week’s pace, as metals continued to advance. Nickel rallied more than 3.5% once again, testing resistance $28,00/t before closing lower at $26,897/t; cash to 3-month spread has increased to the widest spread since 2007 of $765/t. Zinc is now at the highest level since 2007, but it struggled to break the psychological level of $4,000/t and closed $3,920.50/t. Aluminium continued to break above unprecedented highs, with the recent price level breaching $3,750/t to close at $3,716.50/t. Likewise, iron ore futures jumped above $160/t.
Oil futures whipsawed as the markets assessed the geopolitical situation, with WTI and Brent trading at $109.62/bl and $112.51/bl. Precious metals fluctuated, with silver softening into $25.04/oz.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 03.03.2022 as of 17:30