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Daily Base Metals Report

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US stocks fell today as markets assessed the data about disappointing labour data. Indeed, US jobless claims rose on the week ending July 18 for the first time since March 13, up 109,000 w/w, indicating a pause in the employment recovery as coronavirus cases surge across the nation. Mortgage rates in the US rose for the first time in six weeks, however, remain close to record lows. The dollar traded down to levels seen in September 2018, and the US 10yr yield on Treasuries declined to 0.5823%. In Europe, consumer confidence stalled in July, and Italy approved a $29bn extra spending proposal to battle the impacts on coronavirus.

Sentiment on the LME was tentatively positive; nickel gained the most ground closing just shy of $13,700/t at $13,689/t. Nickel cash to 3s continued to widen to -$38.25/t. Aluminium was well bid closing below the resistance level of $1,705/t at $1,701/t. Copper prices were also stronger, breaking above the $6,550/t level to close at $6,544.50/t. Lead and zinc were on the front foot, closing higher on the day at $1,826/t and $2,239.50/t respectively.

Oil futures slumped in the second half of the day with demand worries coming from Asia and the US. At the time of writing, WTI and Brent trade at $42.06/bl and $44.24/bl respectively. Gold continued this week’s rally, edging close to $1,895/oz and silver was down on the day at $22.87/oz.


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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.