US stocks weakened today, but not enough to erase the previous day’s gains as investors await the minutes from the central bank and a possibility of a ban on coal exports from Russia by the EU. The Fed’s Governor Brainard stated that the policymakers would continue to tighten monetary policy and shrink the balance sheet as soon as May. The 10yr US Treasury yield rose for the third straight day to a 3-year high of 2.56% as a result; the focus on the yield inversion prevails in the broad Treasury market and its consequences on the economic outlook. Likewise, the dollar jumped higher to $99.32. In the meantime, according to the Goldman Sachs gauge, the US labour market is now the tightest since WWII, further stoking the speculation of aggressive interest rate tightening.
Metals fluctuated once again today, with hawkish Fed comments offsetting the news of a complete lockdown in Shanghai. Indeed, Shanghai extended its containment measures to the entire city, causing near-complete isolation of the country’s financial hub. Aluminium gained footing, testing resistance at $3,515/t before edging lower to close at $3,465/t. Copper was mostly range-bound, trading at $10,484/t before closing at $10,455/t. Nickel saw moderate declines as the metal closed at $33,312/t. Zinc and lead closed at $4,296.50/t and $2,428/t, respectively.
Oil futures declined during the day, however, still managed to settle in unchanged day-on-day, following the EU’s statement that sanctions will stay clear of oil, as attention shifted to coal. WTI and Brent traded at $103.26/bl and $107.39/bl. Precious metals softened marginally, gold and silver fell to $1,927/oz and $24.43/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 05.04.2022 as of 17:30