The US markets opened Monday faced with continued floods of volatility, as stocks fluctuated during the day. The Fed’s is scheduled to speak Wednesday, with markets now forecasting 7 quarter-point rate hikes this year, as the crisis in Ukraine pushed commodity prices to unprecedented levels. In the meantime, the Bureau of Labour Statistics data pointed to another decline in unemployment rate in January, with some states seeing record low jobless rates, a sign that the US is in a better place to withstand the consequences of the crisis. In Asia, Chinese listed stocks in Hong Kong experienced the worst performance since November 2008, as concerns grew surrounding China’s close relations with Russia. The dollar edged lower and the 10yr US Treasury yield climbed to test 2.12%, the highest level since June 2019. Agricultural commodities are also starting to feel another round of pressure, as Russia may suspend grain exports starting tomorrow, which could send prices further up.
LME metals began the week on the back foot, in part driven by growing COVID-19 cases in China. The economy imposed strict lockdown measures on Shenzhen, while Shanghai is seeing restricted movement in the city. This is posing greater risk on country’s demand in the meantime. On Friday, we saw Europe announcing its efforts to banning imports of Russian iron ore and steel products, but this has little impact on SGX contact, that continues to fall for the third consecutive day, breaching support of $145.70/mt. Aluminium saw another day of strong selling pressure, falling below the support level of $3,350/t to close at $3,319.50/t; cash to 3-month spread weakened further into -$40.00/t. Copper followed suit, as it fell to test the support level of $9,900/t before settling at $9,935/t. Zinc and lead closed lower at $3,809/t and $2,268/t, respectively.
Oil futures sold off today, falling as much as 6%, as Russia-Ukraine talks paused and lockdown measures in China intensified. WTI and Brent now trade at $102.22/bl and $105.45/bl. Precious metals were also on the back foot, with gold and silver falling to $1,959.51/oz and $25.20//oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 14.03.2022 as of 17:30
