US stocks fluctuated today as volatility gripped the markets, following another round of corporate earnings results and the ECB meeting. The European Central Bank joined the Fed in exceeding the broad market expectation of a 25bps hike to increase rates by 50bps to bring the deposit facility rate to zero, the biggest increase since 2000. This comes at a time of growing government crisis in Italy following Draghi’s resignation earlier this morning. The euro slumped back to 1.019 as markets criticized the ECB for lack of detail behind the guidance for the future path of tightening. US initial jobless claims rose for the third week straight, reaching levels not seen since November, raising alarms over the souring labour market environment. Philadelphia’s manufacturing business conditions also slumped to the lowest level since 1979. The dollar and the 10yr US Treasury yield both struggled to break out of the current ranges.
Mixed performance among the base metals group today, however, the longer-term trend on the downside remains intact. Nickel started on the back foot but later broke through the resistance level of $21,200/t to close at $21,179/t. Aluminium fluctuated but managed to close higher on the day at $2,420.50/t. Copper, however, struggled above $7,350/t as it closed at $7,322/t. Lead and zinc both closed lower at $2,012/t and $2,936/t, respectively. China's stainless steel imports increased by 18% y/y to 271,300mt in June, with Indonesian imports growing by 17.4% m/m.
Oil futures fell during the day on the back of growing stockpiles and increasing output from Libya. WTI and Brent now trade at $96.95/bl and $104.66/bl. Russia resumed gas shipments to Europe, which should provide some relief for a brewing energy crisis; the capacity is only set to be capped at 40%. Precious metals caught a bid in the latter part of the day, with gold and silver jumping back to $1,713/oz and $18.79/oz, respectively.
All price data is from 21.07.2022 as of 17:30
