1. Metals Outlook
  2. Daily Base Metals Report

US stocks reversed earlier losses on Friday after a mixed labour market report. The risk-on sentiment returned to the market today, pushing riskier assets higher as the Treasury yields declined. In particular, the nonfarm payrolls increased at a solid pace last month, gaining 187,000, in line with June performance; wages rose faster than expected by 4.4% y/y, suggesting that continued labour market tightness is creating further pricing pressures. This also creates a more solid footing for US consumers, as spending, albeit softening, is likely to remain positive on a year-on-year basis. The dollar weakened as a result. Elsewhere, the ECB has stated that the underlying inflation has likely peaked and is likely to continue to soften in the face of higher interest rates.

Mixed market performance was seen across the complex today. Aluminium remained above $2,200/t, closing at $2,232.50/t, while copper retested the $8,600/t resistance. Likewise, tin attempted to breach back above the $28,000/t level but struggled above it, closing at $27.700/t. Lead and zinc continued to give up their most recent gains, settling at $2,127.50/t and $2,504/t, respectively. The positive momentum seen last month was propelled by increasing pledges from Chinese policymakers to support the economy. However, as we have mentioned in our previous comments, we do not expect to see protracted upside gains until the economy is recovering in a sustainable manner. Still, longer-term support levels are likely to solidify in the near term, supported by the pause in the tightening cycle from the Fed and the continued longer-term trend from green energy globally.

Oil futures remained elevated at $82/bl and $85/bl for WTI and Brent, respectively. Meanwhile, gold and silver jumped higher in the second half of the day following the labour market report release, suggesting that precious metals continue to be driven by monetary policy expectations from key central banks.

Lme Metals Price And Volume 04082023

All price data is from 04.08.2023 as of 17:30


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