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Daily Base Metals Report

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US stocks fluctuated today on the back of mixed economic data. The Fed policy decision is due later today. Congress seemed to wrap up the $700bn bill, attempting to pass by the end of this week. US retail sales fell by 1.1% m/m, below estimates, highlighting the need for an additional boost to stimulate sales. The dollar softened and the 10yr US Treasuries yield edged up to 0.9229%. Elsewhere, the EU stated that the fishing rights remain the last major hurdle in Brexit negotiations. The pound strengthened.

Activity on the LME was mixed today, with only nickel and lead closing marginally lower. Copper was well bid today, but failed above $7,875/t and closed at $7,836/t. Aluminium was slightly firmer in the first half of the day but closed near the day’s lows at $2,035/t. Zinc and tin prices were stronger on the day, closing on the front foot at $2,832/t and $19,925/t respectively. Nickel tested the support level at $17,300/t but closed higher at $17,411/t; cash to 3-month spread widened out to -$57.25/t. Iron ore prices were higher on the day, closing at CNY1,000/mt.

Oil futures jumped to the highest levels since February on the back of stimulus optimism. At the time of writing, WTI and Brent trade at $47.71/bl and $50.96/bl. Precious metals were mixed, with gold and silver edging higher to $1,853.56/oz and $24.94/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.