After such an extraordinary day yesterday, financial markets suffered from risk-off sentiment. Global equity markets sold off, as a result, the S&P 500 fell 3% with other major equity markets down a similar amount. The prospect of another stimulus package from the U.S. government was not enough to support indices, the 10-year treasury yield has fallen below 0.55%.
Trading on the LME was no different to markets elsewhere, risk-off appetite caused metalS to give back some recent gains. Copper fell over 2% to close at $5,030/t above key support at $5,000/t. Nickel prices broke back through $12,200 to close at $12,197/t. Selling pressure also caused Ali to break back through support art $1,500/t to close on the back foot at $1,491/t. Lead and zinc also buckled today closing at $1,665/t and $1,911/t respectively. We expect prices to remain on the back foot in the near term. However, prices started to stabilise this afternoon and this helps the market in the coming days.
Gold prices sold off as long liquidations prompted support at $1,700 to be taken out. Bullion trades at $1,677/oz at the time of writing.
WTI prices managed to recover some of yesterday losses and broke back above resistance at 0 and trades at $4.18/bl up 111.11%. Brent prices weaker today as selling pressure caused a breach of support at $20/bl. There have been large inflows into ETFs and this could exacerbate issues come June expiry. We continue to look closely at ETF open interest in the delivery month.