US stocks continued to rebound on the back of solid economic data and a less hawkish outlook from the Fed minutes yesterday; retail shares drove the gains after elevated profits forecasts as consumer demand remains robust. A decline in US mortgage rates by the most in more than two years back down to 5.28% from 5.50% has helped the sentiment. Meanwhile, after revising the GDP figures for Q1, data revealed that US corporate profits fell by the most in almost two years as companies struggled with high input costs, and consumer spending was upwardly revised to 3.1% - further highlighting current consumer resilience to elevated inflationary pressures. US initial jobless claims fell by 8,000 to 210,000 in the week ending May 21; the decline was more than forecast and underscores the prevailing labour market tightness ahead of the nonfarm payroll data coming out next week. The dollar softened as it found resistance at 102, and the 10yr US Treasury yield held above the 50 DMA at 2.77%.
Mixed sentiment on the LME exchange today despite strongly pessimistic comments coming out from Premier Li Keqiang in regards to Chinese economy yesterday. Nickel saw another day of positive gains, as the metal seems to have found support around $26,055/t over the course of the week; it later closed at $27,198/t. Influenced by the lockdown restrictions in China, we saw a widening divergence between the supply and demand of metals. In particular, SMM expects total primary nickel demand in China to grow by 9% y/y in 2022, with supply growing by 16%. This would create a surplus of 140,000mt in Ni content by the end of the year, with NI and nickel salts driving the surplus. Lead was also seen higher, closing at $2,127.50. Aluminium and copper fluctuated throughout the day but closed marginally lower at $2,865/t and $9,353/t.
Oil futures jumped higher as US stockpiles continued to show signs of broad-based decline. WTI and Brent strengthened to $114/bl and $117/bl. Precious metals fluctuated, with gold and silver settling marginally lower at $1,846/oz and $21.92/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 26.05.2022 as of 17:30
