Palladium outperforming again

Strongest relative demand from clean energy push

Chart of the Day

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It was generally a strong day for the precious metals yesterday, but palladium was the clear outperformer. Moves the past week have now ranged from a rise of 3.1% for platinum to a rise of 7.3% for palladium. That’s partially due to supply disruptions at some mines, but also because vehicle makers increasingly desire the metal in order to meet tighter environmental standards.

Macro

In the UK, core inflation rose at 1.0% in March. Retailers' price expectations suggest it could rise in the coming months, though not by particularly much given the stimulus there.

In Canada, inflation rose to 2.2% in March, while core inflation increased to 1.4%.

The Bank of Canada held its policy rate at 0.25% yesterday, while slowing its QE purchases.Its inflation-adjusted policy rate is about -2%.

The weekly US EIA report showed the amount of gasoline supplied to the market rose by 0.2 mn barrels last week and is now just 1.4% lower than their average at this time of year over 2017-19.

Mortgage applications for house purchase rose by 5.7% last week, perhaps partially because mortgages rates have dropped back again.

Markets

It was a quick turnaround for equities. The S&P 500 has outperformed the other major US indices in the past week, rising by 1.2% while the Russell 2000 fell by 0.4%.

Materials have been doing well lately.

By contrast, energy has been the obvious underperformer again.

The BoC’s announcement helped lift the CAD, though it is no higher than it was a few weeks ago.

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