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Daily Base Metals Report

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US stocks were mixed, as the investors' outlook regarding economic recovery fluctuated, with Nasdaq 100 suffering the worst weekly decline since March. The dollar strengthened for the second day, and the 10yr US Treasury yield steadied down to 1.4926%. Asian shares tumbled, plunging the most in 11 months, alongside the European equities. The central banks across the world are escalating efforts to calm the markets from rising yields in the US, with the ECB suggesting more stimulus could be added if the surge hurts growth. On the virus front, J&J nears US approval of the vaccine, while more than 225m shots are already given worldwide.

Metals prices were all weaker yesterday alongside equities as investors adopted a risk-off sentiment. Copper prices sold off below the key support at $9,050/t, sliding the most in a month, but support at that level triggered a close at $9,077/t. Tin saw the strongest selling today, down 6.11%, closing at the day’s lows at $25,664/t; cash to 3-month spread widened out to $875/t. Aluminium remained under pressure, closing at $2,154.50/t. Nickel tested the $18,515/t level in the second half of the day and closed near the day’s lows at $18,577/t.

Oil futures hit the highest level in more than a year, with WTI and Brent trading at $62.68/bl and $65.68/bl at the time of writing. Gold and silver extend their rut, with both metals down on the day to $1,720.16/oz and $26.26/oz respectively.

*All price data is from 26.02.2021 as of 17:30

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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.