1. Metals Outlook
  2. Daily Base Metals Report

US stocks closed the week higher on Friday after a solid job report boosted risk-on sentiment. Nonfarm payrolls increased by 339,000 in May, after a solid 294,000 performance a month before. At the same time, the unemployment rate rose to 3.7%, and the wage growth cooled. Still, markets remain hopeful that the economy is resilient even in the face of elevated interest rates, and we saw forward swaps increase the case for further tightening from the Fed at 19bps across the next two meetings, underscoring that the economy is strong enough to take the effects of even higher interest rates. Still, we believe that policymakers are unlikely to hike rates in the coming meetings, as it takes 2-3 quarters on average for hikes to filter through the real economy. Further adding to the confidence is the Senate passing the legislation to suspend the debt ceiling today; the deal is most likely to be signed next week. The dollar remained supported by 103.40, and the 10yr US Treasury yield jumped back to 3.67%.

Base metals also saw another boost of optimism following the news that China might be working on releasing new measures to support the property market after existing properties failed to propel the sector in recent months. Metals primarily used in the construction segment benefitted the most. Iron ore futures jumped higher to $104/mt, and zinc pared another day of gains, closing higher at $2,306.50/t. Aluminium fluctuated after testing the resistance level at $2,300/t before edging lower to $2,263.50/t. Copper remained unchanged at $8,237/t.

Oil futures also saw a protracted recovery, with WTI and Brent jumping back above $72/bl and $76/bl. Precious metals, including gold and silver, remained unchanged at $1,962/oz and $23.70/oz, respectively.

Lme Metals Price And Volume 02062023

All price data is from 02.06.2023 as of 17:30


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