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Daily Base Metals Report

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US equity markets started the week on the front foot as small-cap stocks were well bid and confidence returned to the market, following some jitters last week due to the rally in yields. The House of Representatives passed a $1.9trn, however, there are question marks over if the plan will reduce the slack in the labour market. The Fed later this week is clearly a key event for markets, as investors look for any indication of a change in policy direction. The ECB has started to slow the pace of their pandemic bond-buying to 12bn euros, down from 17.2bn the previous week. The dollar index has edged higher today, with cable failing into resistance at 1.40. 

Sentiment on the LME was mixed today, tin prices are down 8% after failing above $25,000/t and closed at $23,460/t, the cash to 3-month spread stands at $279/t. Aluminium prices were also weaker today, after failing above $2,185/t and closing at $2,154.50/t. Copper failed to gain a footing above $9,200/t and closed at $9,044/t but the cash to 3-month spread remains backwardated at $45/t. Zinc and lead prices are were firmer today, closing at $2,804.50/t and $2,071/t, respectively. Nickel prices were also stronger after finding support at $18,500/t and closed at $18,682/t.

Energy markets gave back this morning's gains amid a stronger dollar and also the prospect of OPEC+ increasing supply in their meeting this week. Saudi continue to call for caution in the market. WTI and Brent prices trade at $61.42/bl and $64.61/t, respectively. Gold prices continued to struggle today, trading down to $1,728.90/oz at the time of writing and silver trades at $26.76/oz. 

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

*All price data is from 01.03.2021 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.

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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.