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Daily Base Metals Report

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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.

 

Disclaimer

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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