US stocks were on the front foot despite the negative GDP performance in the US. The figure surprised on the downside, as it fell by 1.4% q/q in Q1 2022, still up by 3.6% y/y. This figure is way below the market consensus, driven in large by surging trade deficit and slow build-up of businesses’ stockpiles; consumer demand and investment, the biggest drivers behind economic growth, remained robust. Therefore, the figure is unlikely to sway the Fed’s decision, as markets price in a 50bps rate hike during the next meeting in May, as inflationary pressures are likely to persist for the medium term. US initial jobless claims declined moderately in the week ending April 23rd, falling to 180,000 as the labour market continues to show resilience in recovery. The dollar remained higher alongside the 10yr US Treasury yield. Elsewhere, Germany’s inflation quickened to record highs of 7.8% y/y in April, in line with the rest of the bloc’s performance.
Mostly a negative day on the LME today, supported by robust dollar performance and further sell-off in the yuan amidst the weak economic backdrop in China. Today’s performance is an indication that the markets are not yet convinced about supportive statements coming from PBoC as they are yet to provide concrete details on the scale of support. Aluminium saw the strongest declines, falling below the support level of $3,035/t to close marginally lower at $3,031.50/t. Next in line was zinc, falling to test the support of $4,109/t, the level not seen since the start of the month. Likewise, copper weakened, breaking support at $9,700/t to close at $9,697/t. Lead and zinc closed lower at $2,255/t and $4,136.50, respectively. Only tin was higher on the day, closing marginally higher at $40,045/t.
Oil futures edged higher on the prospect of an oil ban from Russia by the EU. Germany is prepared to back the decision, given the phase-out approach is gradual and will take place over the course of this year. WTI and Brent strengthened into $103.78/bl and $106.53/bl. Precious metals were mixed, with gold and silver trading at $1,886/oz and $23/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 28.04.2022 as of 17:30