US stocks fluctuated after a disappointing economic growth figure, clouding the outlook for soft landing from the Fed. US GDP fell by 0.9% annualised rate, putting the economy in a technical recession; personal consumption grew by 1.0%, a slowdown from Q1. As a result, the 10yr US Treasury yield slipped below 2.7%, the lowest level since April; 2yr yield fell by more than 20bps to 2.89%. At the same time, the Fed’s Chair Powell rejected the speculation of recession in the US in yesterday’s meeting. US mortgage rates for 30-year loans dipped to 5.3% for the first time in a month. US initial jobless claims fell once again to 256,000 in the week ending Jul 23, still holding at November highs. The dollar remained unchanged at 106.5. Elsewhere, German inflation resumed the climb, after a slight dip in June, as it grew by 8.5% y/y, as the impact of the temporary relief measures from the government wore off. Euro-area confidence hit the weakest point int 17 months as recession fears grew strong in July.
Broad gains were seen across the LME exchange today, following the Fed’s decision to hike interest rates by 75bps. The gains were capped after another contraction in US economic growth brought forward the speculation of softer Fed tightening in September. Zinc gapped higher on the open, at $3,095/t, before steadily gaining pace to close at $3,160/t. Likewise, copper gained a footing to test resistance $7,830/t before trading down to close at $7,762/t. Aluminium fluctuated during the trading hours to close at $2,456/t. Aluminium LME stocks continued to decline, falling consecutively for 2-months straight to reach 31-year lows of 146,350, further highlighting marker tightness. Nickel whipsawed between highs and lows of $22,250/t and $21,500/t, respectively, before settling at $21,935/t. Only lead closed lower at $1,997/t.
Oil futures fluctuated after US GDP figure dimmed the demand outlook. WTI and Brent trade at $98/bl and $107/bl, respectively. Silver rallied on the back of the Fed optimism, jumping back to $19.80/oz; gold gains were much more moderate as it edged higher to $1,754/oz.
All price data is from 28.07.2022 as of 17:30