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Daily Base Metals Report

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US stock market sell-off accelerated today, with Nasdaq plunging by around 5%, as the risk-on sentiment subsided. US initial jobless claims totalled 881,000 in the week ending August 29th, a drop from last week, painting a mixed picture around the labour market. The US trade deficit increased to the widest point in 12 years, pointing a slow economic recovery ahead. Moreover, the ISM service index fell to 56.9, dropping from a one-year high in July. The dollar advanced, and the yield on the 10yr US Treasuries softened further into 0.6266%.

Metal prices were weaker today due to the weakness in the macro, except for lead which was well supported above $1,940/t and closed at $1,944/t. Copper prices sold off to test appetite at $6,550/t, but support at that level triggered a close at $6,563.50/t. Nickel saw the strongest selling today but was supported above $15,000/t and closed at $15,095/t. Aluminium remained under pressure closing at $1,780/t, and the cash to 3-month spread tightened into -$35.55/t. Zinc tested the $2,485/t level in the second half of the day, however, closed near day’s low at $2,514/t. Iron ore has reached a record high today, driven by positive steel demand outlook, closing at CNY862.50/mt.

Oil futures dropped as stronger dollar and fears of oversupply took hold of the market. At the time of writing, WTI and Brent trade at $40.96/bl and $43.69/bl. Palladium touched a 5-month high on news of improving car sales; however, gold and silver were down on the day, edging down to $1,927.57/oz and $26.72/oz 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.

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