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Daily Base Metals Report

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US stocks declined yesterday as concerns grew around rising interest rates in the future. The US initial jobless claims hit a four-week high of 861,000 in the week ending February 13th, highlighting still-present uncertainty in the labour market. Meanwhile, US housing starts fell in January, the first time in five months, signalling that rising prices might be eroding buyer demand. The dollar softened, and 10yr US Treasury strengthened yet remained below the 1.31% level. Elsewhere, the pound touched the stronger level against the euro since March 2020, as the successful rollout of the vaccine spurred market optimism. Manufacturing and Services PMIs and UK retail sales are going to be released today, with the latter expected to slow down drastically from the previous month.

Prices on the LME were seen higher yesterday* as risk appetite prompted the market. Copper prices traded up to $8,633/t – an 8-year high, as China’s traders returned from the holidays, but resistance at this level triggered a close lower at $8,553/t. Copper cash to 3-months tightened up to $20.25/t. Nickel saw the strongest gains today, edging higher to $19,200/t to close marginally below at $19,148/t. Aluminium prices also strengthened today, closing at $2,137.50/t. Likewise, SHF aluminium closed on the front foot at CNY16,510/mt. Zinc was supported in the first half of the day but edged lower down to close at $2,855.50/t. Lead range-bound, closing marginally higher on the day at $2,117/t.

Oil futures traded higher yesterday as the freezing conditions in the US caused 4m bpd or 40% of the nation’s crude production to go offline. At the time of writing, WTI and Brent are softer at $59.76/bl and $63,33/bl. Precious metals were mixed once again, with gold and silver edging down to $1,770.50/oz and $26.91/oz respectively.

*All price data is from 18.02.2021 as of 17:30

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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