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Daily Base Metals Report

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US stocks were mixed after another day of “hopeful” statements regarding the spending bill. US initial jobless claims declined to 787,000 in the week ending October 17th, the third week of decline in a row, suggesting a gradual recovery in the labour market. US mortgage rates have fallen to record lows once more. The dollar strengthened 92.921 and the yield for 10yr US Treasuries edged up to 0.8394%. In Europe, with the number of coronavirus-related cases reaching record highs, the UK has introduced a continued furlough scheme for businesses affected by Tier 2 lockdown. US hospitalisations for COVID-19 jumped to a 2-month high.

The sentiment on the LME was weaker today, except for zinc which recovered from last day’s losses to close at $2,578.50/t. Aluminium swung between gains and losses, edging up to the resistance level at $1,850/t in the second half of the day before closing just below at $1,846.50/t. Aluminium cash to 3m spread widened out marginally to -$12.00/t. Copper was particularly weak as protracted selling pressure triggered a close at $6,922.50/t. Nickel and lead prices traded lower and closed above the key support level of $15,700/t and $1,790/t at $15,817/t and $1,811/t respectively. Iron ore was range-bound, closing at CNY796.5/mt.

Oil futures were on front foot today, driven by stimulus bill talks in the US. At the time of writing, WTI and Brent trade at $40.84/bl and $42.66/bl. Precious metals were all weaker, with gold and silver edging down to $1,901.35/oz and $24.56/oz respectively.


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