US stocks reversed yesterday's losses ahead of the Fed meeting tomorrow. From the macroeconomic standpoint, US producer prices rose by 10% y/y in February, driven by higher cost of goods, setting the scene well for the Fed to begin the hiking cycle. The markets are now pricing in a 25bps hike tomorrow, which seems to be on the conservative side of what we have seen not so long ago. On the other hand, the NY state manufacturing activity weakened significantly in the first two weeks of March as orders fell and lead times continued to climb. The dollar and the 10yr US Treasury yield both fluctuated. The yuan erased the previous day's losses after the news that Saudi Arabia is willing to price some of its oil sales in local currency. In the meantime, Chinese bond yields jumped the most in more than five months after the PBOC chose to halt the loosening of monetary policy, addressing a strong start to a year as one of the reasons behind the decision.
Another day of declines on the LME market today, as growing number of COVID-19 cases in China dampen the demand outlook. Aluminium continuing to drive the group lower, as it fell to test the $3,220/t level before settling into $3,277.50/t. Copper fluctuated but ended up edging lower closer to day-end and closed at $9,904/t at the time of writing. Nickel trading is to resume tomorrow. Lead and zinc were mostly range-bound, closing at $2,242/t and $3,798/t, respectively. Only tin was higher on the day,
Oil futures declined once again today, as they fell by more than 5% once again, driven in large by renewed hopes of the Iran nuclear deal and weakness coming from Chinese demand. WTI dropped below $100/bl to $97.17/bl, with Brent following suit at $101.35/bl. Gold fell for the third straight day to $1,929.50/oz, while silver saw marginal declines to $24.96/oz.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 15.03.2022 as of 17:30
