US stocks slid following the disappointing economic data today; the social media shares led the declines after a profit warning from Snap, the Snapchat owner. New home sales plummeted in April, falling by 16.6% to 591,000, the weakest level since April 2020, as a combination of high prices and steep mortgage rates continue to dent demand. At the same time, business activity fell to a 4-month low in early May as higher prices cooled demand. The dollar continued to decline, falling below the 102 level. The 10yr US Treasury yield fell to 2.73%, while the 2yr yield sold off by 16bps down to 2.49%. The euro edged higher after the ECB Governing Council member Kazaks stated that officials should consider raising interest rates by 50bps if the inflation outlook is justified.
LME metals all saw moderate declines across the board today, following the muted demand outlook coming from China. The PBoC is continuing to pledge support for the economy, with the latest meeting on Monday urging lenders to boost loans and to maintain the stable growth of property loans, as loan growth slumped in April, plunging to the lowest level since 2017. Nickel saw the strongest losses, falling by more than 4%, down to $26,550/t. Copper losses were much more moderate, but the metal tested support of $9,400/t to settle at $9,453/t. Lead and zinc closed lower at $2,168.50/t and $3,790.50/t, respectively. Aluminium followed suit, falling below the support of $2,910/t to settle at $2,901.50/t. From other commodities, India is set to restrict sugar exports to help protect exports that are at risk of global food prices.
Oil futures wavered today as a result of offsetting impacts of China’s lockdown restrictions and a lack of supply coming from Saudi Arabia. WTI and Brent trading at $109.50/bl and $113.22/bl. Precious metals caught a bid, with gold and silver edging higher to $1,869/oz and $22.14/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 24.05.2022 as of 17:30
