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Daily Base Metals Report

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US stocks fluctuated on conflicting news of rising COVID-19 restrictions and continuing presidential election counting. The possibility for a Biden win has increased as it shows that Pennsylvania, a key swing state, is looking to lean slightly towards Democrats. In October, the US labour market strengthened, and the unemployment rate declined down to 6.9%, highlighting the strength of the market despite the additional fiscal relief. The dollar weakened further, down to 92.204, and the 10yr yield on US Treasuries strengthened up to 0.8202%. Elsewhere, in Europe, France warned about the second wave of infections and joined the bloc to report new record highs of daily infections.

Activity on the LME was mixed today with only nickel and lead closing lower. Copper continues to be well bid, but failed above $6,980/t and closed at $6,946.50/t. Aluminium was slightly firmer, and managed to close just below the resistance level at $1,901.50/t. Zinc and tin prices were stronger on the day, closing on the front foot at $2,634.50/t and $18,360/t respectively. Nickel edged lower down to the support level at $15,250/t and closed higher at $15,362/t; cash to 3-month spread tightened into -$30.00/t.

Oil futures extended the losses, with WTI and Brent falling down to $37.40/bl and $39.67/bl respectively. Precious metals were mostly higher, with gold and silver trading higher to $1,953.43/oz and $25.53/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.

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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.