US stocks rose after President Biden stated that he’d reconsider China tariffs imposed by the Trump administration. Meanwhile, from the monetary policy side, St Louis President Bullard said that the central bank should front-load an aggressive series of hikes to push rates to 3.5% before slowing down to ensure inflation expectations are under control. The dollar weakened to 102 while the 10yr US Treasury yield remained largely unchanged. Lagarde that the ECB is likely to raise rates in July and exit the negative territory by the end of September; that would put mean two rate hikes of 25bps in July and September meetings. The euro rose to an intraday high following the comments. In the meantime, German business confidence increased in May, although it remained below the long-term average, as companies navigated through another month of turbulent environment.
Metals on the LME exchange were mostly higher today, pushed by dollar weakness. Copper tested support at $9,400/t before gaining ground to close higher at $9,548/t. Aluminium was supported at $2,960/t but broke below it later on in the day to close at $2,956/t, still higher day on day. NorNickel said that it sees the global nickel market in surplus of 37k tonnes for this year, with it widening further to 100k in 2023; the earlier forecast for 2022 was 59k tonnes. It followed that nickel exports had not been largely affected by trade disruptions. Nickel continued to edge lower to close at $27,732/t. Lead and zinc closed higher at $2,192/t and $3,786/t, respectively. Meanwhile, lockdowns in Beijing and Tianjin continue to escalate as cases climb in China, and while Shanghai saw a partial lift of restrictions last week, most people are still unable to move freely, continuing to restrict demand.
The EU is increasingly unlikely to introduce the ban on Russian oil as Hungary continues to oppose the measure, possibly dragging the sixth package until much later on. WTI and Brent fluctuated, edging marginally higher to $110/bl and $113/bl. Precious metals caught a bid in the first half of the day on the back dollar retreat but weakened back shortly thereafter, causing gold and silver to trade range-bound day on day.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 23.05.2022 as of 17:30