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Daily Base Metals Report

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US stocks were seen higher today, with Dow Jones edging close to an all-time high, on the last day of Trump’s presidential term. Treasury Secretary nominee Janet Yellen stated that she would not seek a weaker dollar to gain competitive advantage. The dollar was still down on the day, and the 10yr US Treasury yield strengthened up to 1.0988%. The euro was on the front foot, as of ZEW Survey Expectations index increased above market expectations, as investors grew more confident about economic recovery. On the virus front, Germany extended the lockdown restrictions into mid-February, a move to further suppress the spread of the virus.

Another day of mixed results on the LME market. Nickel prices edged higher today, breaking above $18,400/t before closing lower at $18,215/t; the cash to 3-month spread has widened out once again to -$50.00/t. Lead was well-bid above $2,000/t for the second half of the day and closed just off the day’s high at $2,015/t. Zinc was mostly range-bound and tested the resistance level at $2,690/t before closing at $2,686/t. Aluminium traded lower to the $1,950/t support level and closed on the front foot at $1,964/t. Copper was weaker today, closing at $7,954/t.

Oil futures edged higher on the back of stimulus hopes from the US; WTI and Brent are trading at $52.96/bl and $55.89/bl at the time of writing. Precious metals fluctuated ahead of the Yellen speech, with gold trading at $1,841.50/oz and silver at $25.26/oz.

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.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

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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.