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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%.


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