US stocks advanced today following the divergence in core and overall consumer price increases. CPI increased by 8.5% y/y in March; meanwhile, core level grew by 6.5% y/y. While the level is the highest since 1981, the core came out slightly below expectations in large due to a fall in vehicle prices. Given the persistence of such high figures, we will continue to see deteriorating confidence levels. Indeed, March saw US small business sentiment fall for the third straight month to near pandemic lows. The 10yr US Treasury yield softened below 2.70%, and the dollar was marginally lower. Elsewhere, UK retailers warn that inflation is curbing demand for sales as increased prices deteriorate consumer spending power.
Most metals gained marginal ground today following slightly better-than-expected data from the US. Additionally, overall sentiment has been boosted by a report of declining cases in Shanghai. Zinc jumped higher in the latter half of the day, testing the resistance of $4,400/t before closing at $4,376/t. Likewise, copper found footing later on in the day to increase into $10,342.50/t. Aluminium was range-bound, closing at $3,267/t. Only tin was down on the day, closing at $42,793/t. Iron ore futures edged higher to close at $155.62/mt after four consecutive declines after China pledged to support the economy, helping to brighten the stainless steel outlook.
Oil futures responded strongly to the reports of potential lockdown rule easing in Shanghai, rallying more than 6% on the day, with WTI and Brent increasing back above $100/bl into $101.07/bl and $105.28/bl. European gas prices edged higher, the first upward move since last week, as Russian supplies through Ukraine are forecast to fall. Gold and silver were on the front foot following inflation data, trading at $1,972/oz and $25.56/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 12.04.2022 as of 17:30