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Daily Base Metals Report

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US stocks fluctuated as the focus has shifted to inflation expectations once again. The Fed’s Chairman Jerome Powell stated the willingness to continue to support the economy and letting it run hotter, which has spurred bets on faster growth and inflation forecasts. The initial jobless claims rose unexpectedly in the week ending March 13th pushing it to the levels last seen in mid-February. The 10yr US Treasury yield climbed to 1.7312%, the level last seen in January 2020, while the 30yr yield touched 2.48%. The dollar strengthened. In Europe, the drug regulator deemed AstraZeneca as safe to use, recommending to proceed with the inoculation programme.

Sentiment on the LME was mixed again today. Zinc was the big mover, falling below the key support level of $2,800/t and closed at $2,792/t. Aluminium fell in the second half of the day to test the $2,210/t level and closed on the front foot at $2,216/t. Nickel softened yesterday after previous day gains; the market closed at $16,036/t; the cash to 3-month spread widened out to -$50.00/t. Lead prices were stronger, as an appetite for prices caused a test of resistance at $1,930/t to close at $1,923/t. Copper closed at $9,055.50/t.

Oil futures sold off on the back of short-term demand concerns as well as the rising dollar. WTI and Brent fell down to $61.10/bl and $64.57/bl. Precious metals softened in the second half of the day, down to $1,733.97/oz and $26.26/oz respectively.

All price data is from 18.03.2021 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.