Risk assets have firmed slightly today, U.S. equities have recovered from early losses. Investors remain buoyed by the fourth round of stimulus; however, uncertainty about the length of the lockdown could cap gains. Despite the helicopter money from the U.S. government, the vast amount of risk may cause consumers to save money instead of spending.
China’s manufacturing PMI rebounded to 52, up from a record low of 35.7 in February. This gave rise to LME prices, and copper took out resistance at $4,900 to test $4,950. Cash to 3s remained steady at $12.50/t contango. We remain cautious about rallies in metals prices despite China slowly recovering. Zinc & Lead prices improved trading to $1,749 & $1,912 respectively, cash to 3s struggled to gain traction closing at $10.75 and $7.79 respectively. Nickel was well bid and tested $11,500, and cash to3s tightened into -$49/t. Demand for spot nickel helped improved support nickel futures.
The risk-on appetite has caused gold to buckle, and tests support at $1,600/oz at the time of writing, but silver is bid around $14/oz. Brent is flat on the day with WTI up 2% to $20.50/bl.