1. Metals Outlook
  2. Daily Base Metals Report

Bets of a higher-for-longer interest rate environment caused the US stocks to strengthen today. The dollar breached the 104.50 level, now at March highs, and the 10-year US Treasury yield is back at 4.25%. As mentioned in our previous comments, we expect the greenback to continue appreciating as the “last man standing” among major economies. This is despite further tightening that is expected from other central banks. Further hikes are more likely to bring recessionary fears forward for developed nations, and we see this weighing on prospective currency pairs. Elsewhere, consumer inflation expectations in the euro area inched up in July, with the 12-month forward-looking forecast at 3.4%, with 3-year ahead at 2.4%, according to the ECB. Euro continued to weaken to July lows.

A day of moderate gains was seen across the base metals market today. Over the longer term, China is set to endure a period of moderate growth while it alleviates some of the debt-service constraints that are weighing on local governments. As of now, there is no quick fix for this issue. However, lower interest rates and easier borrowing conditions seem more likely to emerge in order to support economic growth. In the meantime, Country Garden has paid interest on its dollar bonds, avoiding the first default by a margin and bringing some respite into the property outlook for the economy. Copper remained above $8,400/t as lead and zinc held on to their recent gains, closing at $2,233.50/t and $2,472.50/t, respectively. Aluminium was the only metal that softened during the day, given the scale of gains made last week; the metal closed at $2,193/t.

Oil futures jumped higher after the news that Saudi Arabia and Russia are set to prolong the supply cuts: WTI and Brent strengthened to $83/bl and $90/bl, beating the YTD highs. Precious metals softened on the back of a stronger dollar, with gold and silver now trading at $1,927/oz and $23.71/oz, respectively.

Lme Metals Price And Volume 05092023

All price data is from 05.09.2023 as of 17:30


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