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Daily Base Metals Report

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Authors
G.W

Geordie Wilkes

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Equity markets continue to lack conviction as investors gauge sentiment from the Fed. Data in the US today showed short-term inflationary expectations were lower than forecast, but PPI was still strong, the swaps market indicates that 50bps is the more likely option, and we have highlighted this before. European markets consolidated today, as there was little data released ahead of next week's policy releases. European currencies were bid against the dollar, with cable at 1.2308 and EURUSD at 1.0549. The UK government announced it was looking to reduce regulation on the finance sector as they look to boost growth and make the UK competitive after Brexit in an attempt to cut red tape. While the details are yet to be released, we saw sterling bid today. 10yr yields increased today across the globe, with the US at 3.543 and the UK and Germany at 3.167% and 1.916%, respectively. 
Metals prices faced selling pressure today and struggled to hold onto this morning's gains. Nickel traded higher this morning to test $30,700/t but retreated and is at $29,805/t at the time of writing. Zinc consolidated today and closed at $2,240.5/t; the cash to 3-month price is $45.50/t back. Copper consolidated around $8,500/t, the spread is still in contango, and turnover was thin. We still see the disconnect between futures prices and the physical market, and the 200 DMA has been holding firm. Tin prices softened today and closed at $24,290/t, and the spread has weakened and trades at $38/t back. Aluminium was weaker today and closed at $2,480.5/t; output in China is still strong and expected to be accompanied by higher alumina output in 2023, pushing the market into surplus. 
Energy prices consolidated today above key levels, but momentum remains on the downside. Brent and WTI trade at $76.64/bl and $71.86/bl. Precious metals remain bid, and silver gained the most ground today, up 2.5% at the time of writing, trading at $22.54/oz; gold is back above $1,804/oz at the time of writing.

All price data is from 09.12.2022 as of 17:30

Lme Metals Price And Volume 09122022

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