US stocks furthered their declines, with the tech equities weighing on performance today, following the economic data release. US inflation reached 8.3% y/y in April; whilst softer performance in comparison to March (8.5%), it is above market expectations of 8.1% for this month. Consequentially, the former NY Fed President stated that the Fed should hike to 5% to curb inflation. The 10yr US Treasury yield continued to decline, and the dollar spiked above 104 following the news before coming back to 103.64 levels.
Metals on the LME were mostly on the front foot today, apart from nickel, which continued to see further softness into $27,806/t. Zinc momentum was on the front foot, as the metal edge above $3,660/t to close at $3,668.50/t. Aluminium and copper fluctuated but managed to close marginally higher day-on-day at $2,778/t and $9,340/t. The shanghai physical premium over the LME has widened as shanghai backwardations and falling inventories outweigh activity on the LME. The higher premiums in China have boosted import profits to RMB800/t and premium quotes continue to increase. Lead and tin followed suit, closing higher at $2,118/t and $35,772/t, respectively. Meanwhile, China’s factory and consumer prices rose 8% y/y, compared to March 8.3%, despite the lockdown conditions denting consumer spending abilities. Instead, the strained supply chain conditions squeezed manufacturers’ profits last month, urging them to pass down the costs to consumers.
Oil futures rallied following the two-day decline after the plunge in US crude inventories, pushing WTI and Brent into $104.87/bl and $107.12/bl. Precious metals benefited from higher-than-expected inflation, with gold and silver edging higher at $1,853/oz and 21.79/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 11.05.2022 as of 17:30