US stocks tumbled following disappointing data coming out today; the bonds rallied as a result, and the 10yr US Treasury yield is now at 3.00%. US consumer spending rose by 1.8% at an annualised rate in Q1 2022, vs 3.1% estimated, as inflation deterred consumers from spending. The dollar remained above 104. Elsewhere, German inflation eased in June, growing by 8.2% from 8.7% in the previous month, supported by temporary government relief measures to address the households struggling with rising pricing pressures. At the same time, the country’s unemployment rose unexpectedly in June, the first monthly increase in more than a year; the rise is attributed to an influx of refugees from Ukraine that are currently searching for work.
Lacklustre Chinese recovery and global weakness in demand elsewhere continued to drive the risk-off sentiment across metals today. LMEX lost 12% in June. Indeed, the manufacturing figures became expansionary once again in June, growing to 50.2 from 49.6 in May on the back of easing lockdown conditions. However, attention must be paid to differences between supply and demand that will drive the figure following further lockdown relaxation. Zinc saw the strongest declines, falling by 6% to $3,155/t, the lows not seen since December last year; the cash to 3-month spread continues to decline and now stands at $25.75/t, in line with the longer-term average. Aluminium and copper followed suit, declining marginally to close at $2,445.50/t and $8,258/t, respectively. Nickel fell below the support of $23,00/t to close at $22,698/t.
Oil futures softened after the OPEC decided to reinstate the supply that it halted during the pandemic. The coalition plans to add 648,000 bl/d in August, restoring the 9.7m bl/d level that was shuttered just over two years ago. WTI and Brent now trade at $106/bl and $115/bl. Precious metals were all softer, with gold and silver falling into $1,812/oz and 20.42/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 30.06.2022 as of 17:30