US stocks rose on the back of upbeat corporate earnings results today, reducing the expectations of a 100bps hike this month. US long-term inflation expectations weakened recently, with the University of Michigan's 5-year price forecast at 2.8%, as a recent drop in gas prices helped the sentiment. In the meantime, homebuilders’ sentiment continues to decline as it dropped to the lowest level since May 2020, on the back of compounded factors of inflation and increasing mortgage rates deterring consumer demand. The dollar softened, and the 10yr US Treasury yield advanced back to 3.00% as investors pulled back from safe-haven assets. Elsewhere, China’s central bank injected additional liquidity into the financial system for the first time since June as a growing mortgage boycott, and a growing number of covid cases are adding to the sense of crisis; the daily short-term cash operations have been boosted to 12bn yuan.
Metals have extended their recovery today following last week’s slump. Copper opened higher than Friday’s close and continued to gain footing to edge back above $7,400/t to close at $7,426.50/t. Aluminium followed suit, as the metal found support at $2,370/t before jumping back up to $2,426.50/t, reversing last week’s losses. Nickel breached resistance of $20,500/t as the metal closed at $20,652/t. Lead and zinc closed higher at $1,998.50/t and $3,006/t, respectively.
Oil futures jumped back above $100/bl after Saudi Arabia failed to make any promises in regards to future output outlook. In the meantime, Gazprom declared a force majeure on gas supplies to Europe to at least three major customers, aggravating the fears that Russia would reduce exports to most of Europe. Gold and silver performance diverged as the metals traded at $1,710/oz and $18.88/oz, respectively.
All price data is from 18.07.2022 as of 17:30