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Daily Base Metals Report

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US stocks fluctuated today after another day of intense negotiations around the stimulus bill. The number of COVID-19 cases continues to rise in the US, with the number of daily deaths reaching record highs. US initial jobless claims jumped by 137,000 unexpectedly in the week ending December 5, reaching the September levels once again. Meanwhile, US CPI picked up to 1.2% y/y, above forecast. The dollar weakened and the US Treasury 10yr yield softened out to 0.9311%. The euro rose against the dollar as European policymakers gathered to sign off a $2.2tr stimulus package. In the UK, the Brexit talks seem to be edging towards a no-deal outcome.

Activity on the LME was mixed today with tin and lead closing lower. Nickel continues to be well bid, rallying 4.23% on the day, but failed above $17,450/t and closed at $17,430/t, reaching the highs last seen in October 2019. Copper was also firmer and managed to close just below the day’s highs at $7,878/t. Aluminium tested the resistance of $2,066/t in the second half of the day before closing at $2,060/t. Zinc prices were marginally stronger on the day, closing on the front foot at $2,839.50/t. Lead edged lower down to the support level at $2,077/t and closed higher at $2,088/t; cash to 3-month spread widened out to -$8.25/t.

Oil futures remained broadly unchanged on the back conflicting economic data. At the time of writing, WTI and Brent trade at $47.23/bl and $50.63/bl. Precious metal declined amid the virus stimulus bill relief in the US, with gold edging down to $1,836.51/oz; silver is up to $23.99/oz.


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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.