US stocks wavered today as investors assessed the combination of rising inflation, tighter monetary policy outlook and crisis in Ukraine on market gains. The 10yr US Treasury yield softened to 2.45%; meanwhile, some 5yr bond yields were seen rising above 30yr, a sign that investors are starting to anticipate an economic downturn. The dollar strengthened to test the 99.20 level once again, the February high. Meanwhile. US merchandise-trade deficit narrowed slightly in February from a record performance the previous month, as exports outpaced imports.
The metals started the week on a weak footing, with moderate gains seen across the base metals sector, as industrial profits data coming from China outweighed the growing level of lockdown restrictions in the country. Data rose by 5.0% y/y in the January-February data, vs 4.0% in December, driven by high raw material prices. Aluminium gained marginal ground, edging higher to close at $3,614/t. Copper strengthened in the second half of the day, growing back above $10,300/t to close at $10,341/t. Likewise, lead and zinc closed higher at $2,369/t and $4,087.50/t, respectively. Nickel is the only metal to continue its decline, falling by 6.3% to $32,725/t, as liquidity continues to diminish, with volumes now at really low levels, despite trading within the trading limit range.
Oil futures tumbled more than 6.0% as the latest wave of restrictions in China caused the market to re-evaluate the demand outlook. WTI and Brent fell to $106.89/bl and $113.54/bl. In the meantime, OPEC+ has signalled that they will not adapt the policy despite the Russia-Ukraine conflict. Europe natural gas prices erased earlier losses on the back of colder weather forecast in the bloc as well as the G7 rejecting to pay for Russian gas in rubles. Gold and silver declined as the stronger dollar took some steam out of the safe-havens.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 28.03.2022 as of 17:30
