US stocks declined as Treasuries hit new highs ahead of the Fed interest rate decision tomorrow that is set to see rates increase by another 75bps. This would bring the interest rate to highs not seen since 2008. The 2yr US yield hit the 1994 high of 4.0%, and the dollar rose to 110. Meanwhile, housing starts increased to 1,575k in August from 1,446k despite the diminishing demand in the housing market, primarily driven by the rise of mortgage rates in the country. Elsewhere, Germany is finalising the $8bn deal to nationalise the natural gas giant Uniper as it aims to support the economy during the looming energy crisis.
Mixed price performance across the metal group today ahead of the Federal Reserve decision tomorrow. Aluminium was seen marginally lower on the day, but support at $2,240/t held on, and the metal settled at $2,245.50/t. Likewise, copper struggled to gain momentum as it fluctuated between gains and losses around the $7,750/t level. Lead and zinc closed lower at $1,880.50/t and $3,128.50/t, respectively. Nickel continued to edge higher for the third straight day, but resistance at $25,000/t has capped upside potential.
Oil futures have also braced for monetary policy action this week, with WTI and Brent falling to $84/bl and $90/bl. Gold and silver declined throughout the day to $1,665/oz and $19.22/oz, respectively. Gold in particular has fallen to a two-year low, highlighting the markets anticipation of further interest rate hikes from the Fed. Silver saw similar momentum as all focus is directed at the Fed and BOE later in a week.
For more in-depth analysis of base and precious metals, our Q3 2022 Quarterly Metals report is out now!
All price data is from 20.09.2022 as of 17:30