US stock advance stalled later on in the day, following the selloff in European bond markets. German inflation hit an all time high of 8.7% in May, adding pressure on policymakers to act sooner than currently forecast. At the same time, euro-area confidence edged higher to 105 as concerns surrounding rising prices softened for the second straight month; deteriorated manufacturing sentiment was offset by service and construction sectors. Meanwhile, the Fed is scheduled to start shrinking its $8.9tr balance sheet starting Wednesday. The dollar fell for the third straight session.
Sentiment improved in China as the country recorded the lowest number of COVID-19 cases in 3 months. Shanghai is to lift restrictions for lower-risk areas, and several districts in Beijing will see lifted movement restrictions. Over the weekend, Shanghai stated they will accelerate approvals for property projects as well as increase the quota for car production, in order to help accelerate economic rebound. A purchase tax for some passenger vehicles will be reduced and subsidies will be given to electric-car buyers. As a result, all metals were marginally higher. Nickel saw the strongest gains, closing higher day on day for the fourth consecutive sessions; the metal tested resistance at $30,000/t before closing at $29,279/t. Aluminium and copper were up marginally, closing at $2,888.50/t and $9,543/t, respectively. Lead closed higher $2,175/t. Zinc failed above resistance at $3,950/t to close at $3,900.50/t.
Oil futures surged to a 2-month high following the relaxation of lockdown conditions in China and the EU working through the next round of sanctions against Russia, including a ban on oil exports. In the meantime, shipments from Russia into Europe are rising, edging higher to a 4-week high, as sanctions have not yet impacted the exporter. WTI and Brent now trade at $116/bl and $120/bl. Precious metals were mixed, with gold edging up to $1,856/oz.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 30.05.2022 as of 17:30