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Daily Base Metals Report

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US stocks rose on the day after days of decline on better-than expected economic data. The US economy bounced back in Q3, growing at record 33.1% (annualised pace), in line with a decline seen in the previous quarter. Additionally, US continuing jobless claims declined by 40,000 in the week ending October 24th, more than forecast. The dollar edged higher to 94.049 and the 10yr yield on US Treasuries strengthened into 0.8179%. The euro extended the decline after Lagarde mentioned a possibility of a new fiscal package in December to deal with a worsening economic outlook.

Sentiment on the LME was tentatively negative, only with lead and zinc finishing higher on the day. Copper prices sold off to test appetite at $6,700/t, but support at that level triggered a close at $6,729.50/t. Nickel also saw strong selling today but was supported above $15,400/t and closed at $15,532/t. Aluminium gained ground in the second half of the day, however, still closed marginally lower at $1,803/t. Aluminium cash to 3-month spread widened slightly into -$7.50/t. Zinc and lead were both up on the day, closing at $2,351.50/t and $1,840/t respectively.

Oil futures continued their decline, falling to 4-month low on muted economic demand outlook. At the time of writing, WTI and Brent trade at $35.76/bl and $37.32/bl respectively. Precious metals were mostly lower today, with gold and silver trading down to $1,867.57/oz and $23.30/oz respectively.

Tomorrow, China will release their 5yr plan, with the Press Conference announced at 2am UK time. China has already outlined some of its economic plans for the next five years, promising to build the nation into a technological powerhouse as it emphasised the quality of growth.


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