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Daily Base Metals Report

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The session started on the back foot as risk asset retreated over rising deaths and cases of Covid-19. As the day progressed, equities caught a bid with the DOW and S&P 500 up more than 4% and 4.87% respectively. This was aided by Congress passing the stimulus to improve market sentiment; however, if the government continues to target the economy returning before Easter, we expect long term damage. However, the jobless claims number of 3.2m was a prime example of the economic risk, and we do not have faith in a sustained rally. The dollar index retreated following the U.S. data release.

On the LME copper prices sold off, demand fears continued to impact investor sentiment even though Codelco are reducing production and current prices are below the cost of production for approximately 15% of global supply. The other metals presented a mixed outlook with zinc and lead moving higher to close at $1,860/t and $1,685/t respectively. Cash to 3-month spreads tightened into $-11.75/t and $-10.25/t respectively. Nickel prices closed at $11,211/t, down $78 on the day. Gold caught a bid this afternoon and trades at $1,630/oz at the time of writing.

Oil has sold off sharply this afternoon, WTI took the bigger hit falling 7.23% at the time of writing; Brent is down 7.2%.

Risk warning

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

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