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Daily Base Metals Report

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US stocks gained today, trading just shy of a 5-month peak, on the back of positive earnings expectations. The dollar dipped, and 10Y on Treasuries fell. The increasing rate of new coronavirus infections in the US continued to be ignored in favour of rapid economic recovery as well as discovery and implementation of a vaccine. European stocks followed suit. This Friday-Saturday, an EU summit is planned to discuss the issues of the common budget as well as additional economic stimulus plans.

All metals on the LME were higher today as investor optimism drove the market. Copper prices traded up to $6,600.00/t, but resistance at this level triggered a close at $6,571.00/t; cash to 3s tightened today into $11.00/t backwardation. Nickel prices also strengthened, closing near the day’s high at $13,711.00/t. Lead was supported today, breaking through the resistance level at $1,880.00/t and closing at $1,881.50/t. Zinc gained the most, trading up to $2,270.00/t; however, closed just below at $2,261.50/t. Aluminium remained range-bound, closing higher on the day at $1,690.00/t.

Oil futures fluctuated today ahead of Wednesday’s OPEC+ meeting that might confirm the group’s intention to waiver cuts. WTI and Brent trade at $40.63/bl and $43.31/bl respectively. Gold and silver are up, at $1,806.18/oz and $19.22/oz.

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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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.