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Daily Base Metals Report

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US stocks continued to advance despite a gloomy economic backdrop, as investors speculate on further stimulus support. Trump has agreed to prepare for Biden to take office this month while condemning Capitol attack. US nonfarm payroll decreased by 140,000 m/m in December - the first decline in employment levels since April, reflecting a plunge in service employment amidst the lockdown restrictions; the unemployment level stood at 6.7%, down month-on-month. Meanwhile, the US posted a new daily record for coronavirus deaths, surging past 4,000 a day. The dollar strengthened, and the 10yr US Treasury yield picked up higher to 1.1102%. Elsewhere, UK housing prices picked up to record highs in December as low costs urged additional demand.

Metal prices were weaker today due to the weakness in the macro. Aluminium prices sold off to test appetite at $2,015/t, but support at that level triggered a close at $2,021.50/t. Zinc saw the strongest selling today but was supported above $2,800/t and closed at $2,813.50/t. Nickel remained under pressure closing at $17,667/t, and the cash to 3-month spread widened out marginally at -$55.00/t. Copper tested the $8,020/t level in the second half of the day; however, closed higher at $8,131/t. Iron ore has edged up closer to CNY1,070/mt but closed lower at CNY1,064/mt.

Oil futures edged higher today along with equities, with WTI and Brent trading at $51.63/bl and $55.40/bl. Precious metals sold off on the back of recovering dollar and rising US Treasury yields; gold and silver edged down to $1,860.50/oz and $25.79/oz respectively.


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