US stocks fluctuated as growing recessionary worries are underscoring the chance of strong rate hikes from the Fed. US Treasury curve inversion between 2- and 10-year rates deepened as much as 12bps, the deepest level since 2007, further intensifying the recession risks. The dollar weakened slightly from recent highs back to 107.97; the currency still remains near 2002 highs as investors choose to keep their cash in the US in the meantime. The 10yr US Treasury yield remained just below 3.00%. US CPI data is out tomorrow and is forecast to increase by 8.6% y/y, vs 8.6% in May. Elsewhere, China’s tech stocks resumed the decline as a temporary rebound ran out of steam; the decline was driven by the recent government crackdown on internet companies and their regulations. In Germany, investor confidence slumped to the lowest level since 2011 as mounting risks of the energy crisis are weighing heavily on consumers. The euro edged lower today but managed to hold just above parity.
A day of moderate losses on the LME market today, with all metals declining day-on-day. Iron ore prices tumbled to a 7-month low of $105/mt on the back of a deteriorating demand outlook; investors fear that another round of lockdown measures might be introduced in China, given the recent increase in the number of cases in Shanghai. The metal found support at previous lows and has rebounded slightly during the next day’s trading. Copper fell more than 3.00% after hitting resistance of $7,600/t to close at $7,354/t. Aluminium fluctuated throughout the day, trading marginally lower to $2,360/t. Nickel saw marginal declines into $21,374/t. Lead and zinc closed lower at $1,938/t and $3,016/t, respectively.
Oil futures sold off, falling by more than 6.00% down below $100/bl. Precious metals edged lower, with gold and silver falling into $1,732/oz and $19.10/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 12.07.2022 as of 17:30