1. Reports
  2. Daily Base Metals Report
Non-independent Research

Daily Base Metals Report

Read disclaimer

The US stocks fell sharply today following one of the fastest rallies on record as apprehension in the market increased. Last night dovish comments from the Fed and the expectation of low-interest rates in the long run caused the 10-year treasury yields to fall to 0.675, as the dollar surged. The Fed also promised to inject stimulus further until the labour market stabilises. Fears of the second wave emerged in the US, as total cases topped 2m, especially after the Treasury Secretary Mnuchin announced that the US shouldn’t shut down the economy if the second wave materialises. US jobless claims remain high, however, continue to decline gradually, to 1,542k from 1,897k a week ago.

Similarly, the risk-off appetite caused LME metals to give back some of the recent gains. Aluminium prices traded down to $1,600/t, but support at this level triggered a close at $1,601.5/t. Copper fell over 3% to close at $5,764.5/t giving back recent gains, and breaking through key support at $5,800/t, causing the spread to soften further to -$23.00/t. Selling pressure prompted zinc to close at $2,007/t, above support at $2,000/t. Nickel prices also softened today, with prices closing near the day’s low at $12,656/t. Lead remained on the back foot, closing at $1,740.5/t.

Precious metals lost some of their strength today following the biggest gain in more than a month after the Fed statement to keep interest rate lower for longer. At the time of writing, gold and silver trade at $1,736.36/oz and $17.85/oz respectively. Oil plunged as economic uncertainty fed into the market sentiment, bringing WTI and Brent down to $36.40/bl and $38.85/bl respectively.

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.

Sign-up to get the latest Non-independent research

We will email you each time a new report has been published.

You might also be interested in...

Daily Report FX

A morning report covering fundamentals and technicals for USD, EUR, GBP, JPY, and CHF.

Daily Report Softs Technical Charts

Technical analysis and charts for the key sugar, cocoa and coffee contracts.

Weekly Report FX Options

Commentary and analysis covering OTC currency option pricing, volatility and positioning.

FX Monthly Report July 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. Cryptocurrencies are the focus of this month's FX Monthly report. The report includes a macroeconomic overview as well as desk comments and technical analysis on key currency pairs.

Quarterly Metals Report – Q3 2021

COVID cases are rising across the globe as the delta variant spreads, this is causing some nervousness in financial markets, especially with the higher inflation rhetoric. Commodity prices have fallen since the Fed changed their tune inflation, the dollar has stabilised which has also been a headwind to prices. The summer months are traditionally quieter for metals demand which could prompt metals to consolidate. If the delta variant continues to spread, we may see higher levels of stimulus for longer. As things stand stimulus levels are set to be tapered and this could be brought forward if inflation remains high. We expect markets to remain volatile but on lower volume through the summer months.