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US stocks retreated over concerns of escalating trade tensions between China and the US and worries about global economic recovery. In retaliation to US consulate shutdown, Beijing ordered the US to shut down consulate in Chengdu. US new home sales surged to the highest level in almost 13 years in June, fuelled by record-low mortgage costs. The yield on the 5yr Treasuries declined to 0.2612%, a record low, and the dollar extended the slide down to 94.438. The yuan softened. In Europe, composite PMI jumped to 54.8, a 25-month high, with both manufacturing and services in the expansionary area.

Metals prices were weaker today due to weakness in the macro, except for aluminium which was well supported above $1,685/t and closed at $1,700/t. Nickel prices sold off to test appetite at $13,300/t, but support at that level triggered a close at $13,656/t. Copper saw the strongest selling today but was supported above $6,400/t and closed at $6,415/t. Zinc remained under pressure closing at $2,218/t, and the cash to 3 spread widened slightly into -$4.50/t. Lead tested the $1,840/t level in the second half of the day, however, closed near day’s low at $1,818/t.

Oil futures took a dive on the back of growing economic fears, with WTI and Brent edging down to $40.92/bl and $43.09/bl respectively. Gold topped $1,900/oz for the first time since 2011, trading close to record highs. At the time of writing, gold and silver trade at $1,900.52/oz and $22.67/oz.


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