US stocks pared losses today as investors shifted their focus back to a broad market picture of rising inflation and monetary policy tightening. The 10yr US Treasury yield continued to climb, rising to 2.77% for the fifth day in the row. The dollar fluctuated around 100. UK economy contracted in February as the storms hit construction work and triggered supply chain delays; the figure does not register the full impact of the crisis in Ukraine. US CPI data is out tomorrow and is forecast to have reached 8.4% y/y in March, the January 1982 highs, with rent payments picking up steam. Indeed, the NY Fed Survey showed a one-year inflation estimation of 6.6%, up from 6.0% a month earlier.
Likewise, the base metals group opened the week on the back foot, as China’s covid cases continue to beat record highs, casting a shadow on the economic outlook. Aluminium fell to a month low of $3,221/t before closing at $3,248/t; cash to 3-month spread widened out to -$33.00/t. Similarly, the SHFE contract fell nearly 5% and continued to decline today, falling to a January low of CNY20,605/mt. Nickel opened $689/t lower from Friday’s close and continued to deteriorate, closing at $32,483/t. Copper was seen lower as it closed at $10,200.50/t. Only zinc closed higher on the day at $4,290/t; lead edged marginally lower to close at $2,382/t. In the meantime, Shanghai said to have eased lockdown measures for nearly half of its housing complexes after lifting them for those complexes that had no covid cases in the last two weeks and in turn, reimposing it if they report even a single new case.
Oil futures followed suit, falling more than 3%, with WTI and Brent now trading at $94.50/bl and $98.74/bl. Gold and silver spiked during the latter half of the day to $1,953.74/oz and $24.98/oz, respectively. Palladium extended last week’s gains after the news of Russian refinery closures; the metal is at $2,448/oz at the time of writing.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 11.04.2022 as of 17:30