US stocks extended yesterday’s declines following the Fed minutes stating a reduction in bond holdings at a maximum of $95bn/month, confirming Brainard comments earlier this week. The 10yr US Treasury yield jumped to $2.64%; meanwhile, the 30yr yield rose to the highest level since 2019, crossing back above the shorter maturity yields. The dollar index was range-bound. US initial jobless claims fell to 166,000 in the week ending April 2, the lowest level since 1968, backing the Fed’s belief that the economy is strong enough to weather the aggressive tightening cycle. Elsewhere, Russian inflation is out tomorrow and is expected to nearly doubled year-on-year, with Bloomberg estimates showing 16.90% y/y growing last month, as prices on foods and household items soar, as panic buying took hold.
Metals wavered on LME, but with the weakness growing stronger in the latter half of the day, as manufacturing industry is coming to a halt in China. Aluminium broke below the support level of $3400/t to close at $3,385/t; cash to 3-month widened back to -$29.50/t. Zinc followed suit, falling below the $4,200/t level to close at $4,188/t. Nickel whipsawed during the day, but managed to gain a footing to close $33,698/t. Copper remained unchanged at $10,311.50/t. As EU is planning to join the US to introduce another round of sanctions, there are signs that Russia is finding other ways to support its economy. Indeed, gas exports to Europe, if anything, increased since the end of February ahead of yet-to-be-introduced restrictions.
Likewise, oil futures oscillated today ahead of the IEA crude reserve release, with WTI and Brent trading at $95.68/bl and $100.25/bl. Precious metals also struggled to gain ground day-on-day, with gold and silver edging marginally higher at $1,913/oz and $4.46/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 07.04.2022 as of 17:30