Equity markets got off to a strong start today, as global benchmark indices pushed higher, with European stocks just shy of fresh record levels. With stronger corporate earnings on both sides of the Atlantic consumer confidence has increased substantially and with a lack of notable data releases today the bullish trend was more than happy to continue. The positive sentiment spilled over to Wall Street, as the S&P 500 touched a new record high above 1,952, on track to close higher for the seventh straight session while the DJIA posting steady gains at the open above 16,950. Confidence in US equity markets has improved substantially since throughout May and the beginning of June with the CBOE’s VIX falling to its lowest levels since February 2007, dropping towards 11.00.
Spot gold prices held firm above $1,253/oz despite a firmer dollar index, which gained 0.26% early on as it traded towards 80.630. The DXY found firm support from Friday’s close as market participants continued to digest last week’s stable jobs data. With the dollar index having risen in all but one of the past five weeks the strong start today sets the stage for further gains later on this week.
Three month LME aluminium prices rallied higher for the third straight session today, pushing above $1,900/tonne as intraday moves tested levels last seen in mid-August last year. Prices picked up off mid-May lows towards $1,760/tonne as supply bottlenecks and stable demand prompted sharp slide in LME warehouse inventories of the light metal. Standing at just over 5.35m tonnes at the start of May, inventories have been drawn down steadily over the past six weeks and currently stand at 5.153m tonnes. With the LME now releasing granular data on LME warehouse operators the situation is becoming more transparent with queues at Pacorini’s warehouse in Vlissingen standing at 748 days in April this year.