1. Metals Outlook
  2. Daily Base Metals Report

Equity markets gained ground in the US ahead of the Fed this evening, but gains have muted. In Europe, indices have declined as investors remain cautious with significant central bank rate decisions this week. UK inflation slowed to 10.7% Y/Y but is still near record highs, the 2-year gilts advanced, and the 10yr yield is at 3.31%. We do not see the recent move by the Fed as a pivot. Historically, 50bps is a big hike, and the market is pricing another large rate hike in February. While it is conceivable that equity markets see a 50bp hike as bullish, their outlook for the global economy is not pretty, and earnings will likely be weaker than expected as higher rates are priced in. The USD index edged lower today, but the currency lost ground against most major currencies, with cable at 1.242, EURUSD at 1.066, and USDCHF at 0.9229.

Metals prices were mixed today, with nickel and copper marginally higher. The trend of weakening spreads persisted with the ali cash to 3s at -$42.50/t contango and copper at -$40.50/t contango, participants continue to roll their positions, but there is still a large short in Dec for aluminium. Copper traded in a narrow range compared to previous days and closed at $8,523/t. Aluminium followed a similar pattern and tested the resistance around $2,466/t but softened to close at $2,452.5/t. Zinc gave back some of the recent gains and closed just off the lows at $3,238.50/t; lead also sold off today after failing into resistance at $2,200/t; the market closed at $2,181/t. Appetite for prices at $24,100/t kept tin above key support, but the market closed at $24,275/t.

Energy prices gained ground today as US imports increased this week, but US crude inventories rose 10.23m barrels, the gulf saw the largest increase in stocks, but output declined. Brent and WTI pushed higher and traded at $82.71/bl and $77.37/bl, respectively. Gold and silver consolidated today ahead of the Fed, trading at $1,808/oz and $23.92/oz, respectively. According to Peak Trading Research, momentum CTAs traders at 100% long of gold futures for the first time since April could limit gains.

All price data is from 14.12.2022 as of 17:30

Lme Metals Price And Volume 14122022


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