US stocks weakened today, closing the quarter on the back foot for the first time since the beginning of the pandemic. According to Commerce Department data, in 2021, US corporations experienced the most profitable year since 1950, as government transfers during the pandemic drove household demand. US inflation-adjusted spending declined by 0.4% m/m in February as rising prices tempered consumer demand, taking some pressure off the Fed’s next move in May. The 10yr US Treasury yield fell for the fourth consecutive day; the markets, however, still anticipate a 50bps hike from the policymakers during their next meeting. In the meantime, the US 30yr mortgage rate reached 4.67%, the highest level since December 2018, and we are likely going to see this translate into lower home purchases in the coming months. US initial jobless rate increased by 14,000 in the week ending March 26, still near historical lows. Elsewhere, UK economy grew stronger than forecast in Q4 2021 despite a growing number of omicron cases in the economy, up by 1.3%, driven in large by expanding service industry.
A mixed day on the LME exchange, with metals fluctuating during the day, struggling to find momentum. Aluminium declined, falling below the support level of $3,500/t to close at $3,491/t. Copper wavered but managed to gain some ground, as it closed higher at $10,375/t; cash to 3-month tightened marginally into -$5.00/t. Likewise, nickel whipsawed but struggled to break above resistance of $33,745/t and closed down on the day at $32,107/t. SGX iron ore futures topped $160/mt after Chinese provinces sold infrastructure bonds at a record pace, boosting the expectations for demand recovery after the lockdown restrictions ease.
Oil futures continued their decline, falling by more than $5 today, amid news that the US would release roughly 1m bl/d from its reserves for several months; overall there could be as much as 180m barrels released. WTI and Brent managed to hold above $100 at $103.47/bl and $108.41/bl, respectively. Russia is offering India steep discounts for its oil exports, down to as much as $35/bl, to entice more deals with the country in the longer term. European gas futures continued to grow, despite Russia backing down on its ruble payment, as the demand outlook offset the impact of the news. Gold and silver were marginally unchanged.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 31.03.2022 as of 17:30