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Daily Base Metals Report

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US stocks finished the week on the front foot, as tech led the rally. In the meantime, the Fed signalled that it would let a capital break for big banks to expire by the end of this month. The 10yr US Treasury yield was edging close to the 1yr high at 1.7210% as investors weighed on the risk of inflation. The dollar strengthened. In Europe, as the bloc continues to tackle the vaccination woes, countries such as Germany are facing the possibility of another wave of rising coronavirus cases. The Russian ruble gained as the country’s central bank becomes one of the first to unexpectedly raise the interest rates while signalling that more tightening is yet to come.


Metals on the LME have traded higher today, apart from tin, as some risk appetite returned to the markets. Lead gained the most ground, breaking above the key resistance level at $1,950/t and closing higher at $1,958.50/t; the metal continued to trade higher after the close. Next in line was aluminium, which gained 2.35% on the day, closing just above the key resistance level of $2,260/t at $2,265.50/t. Cash to 3-month spread strengthened into -$31.50/t. Copper briefly topped $9,075/t; however, resistance at that level triggered a close at $9,057/t. Zinc prices were also seen higher on the day, closing at $2,837/t. Tin was under pressure, closing below $25,800/t at $25,675/t.


Oil futures rebounded after heading for the biggest weekly slump since October, driven by colling yields. WTI and Brent edged up to $61.29/bl and $64.44/bl. Precious metals were mixed, but gold and silver edged up higher to $1,742.80/oz and $26.18/oz, respectively.

All price data is from 19.03.2021 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.