European equities sold off as uncertainty surrounding the next rate hikes in the U.K.; in the U.S., markets have traded so far after Fed Chair Jerome Powell indicated that the Fed could avoid a hard landing, but it is getting harder. Christine Lagarde, Jerome Powell, and Andrew Bailey all spoke today and highlighted their concern about inflation. The dollar was firmer today into month and quarter-end, as sterling and the Euro weakened. Economic growth is slowing, and higher rates will certainly impact borrowing costs and hinder the economy more. U.S. yields continued to fall with the 10yr around 3.10%, but we expect yields to push higher in the coming months.
LME prices were mixed today; Nickel rallied following news that Vladimir Potanin was sanctioned; however, Nornickel are not, but Potanin owns 36.% of the company. Nickel retreated from the highs of $25,295/t back towards $23,800/t. Zinc edged higher to test resistance at $3,400/t but closed at $3,360/t. Lead was weaker and closed at $1,932.5/t. The tin spread settled at $351/t back with the 3-month at $26,774/t. Aluminium came under more pressure as China produced a record 3.42m tonnes in May as cheaper energy from Russia reduces costs. Copper edged higher to close at $8,401/t with the spread at $-1.75/t.
Energy prices failed to hold onto the highs, with brent and WTI trading at $118.16/bl and $112/bl at the time of writing. Gold and silver were unchanged, trading at $1,818.84/oz and $20.78/oz, respectively.
For more in-depth analysis of base and precious metals, our Q2 2022 Quarterly Metals report is out now!
All price data is from 29.06.2022 as of 17:30