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Daily Base Metals Report

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Stocks markets in the US gained ground today on the back risk-on sentiment. The 10yr US Treasury yield fell alongside the dollar. Meanwhile, Europe has stepped up its efforts for vaccinations, as countries such as Germany nearly doubled the pace after an increase in supplies. In the UK, inflation accelerated by 0.7% y/y in March after a 0.4% gain in February, buoyed by the cost of fuel and food. The ECB rate decision is out today and markets say that purchases could be stepped up further, particularly given the rise in Italian bond yields.

LME metal prices were on the front foot today, apart from zinc, which closed lower on the day at $2,815/t. Aluminium prices were well supported and tested resistance at $2,370/t, prices closed lower at $2,364.50/t. Copper was well bid in the second half of the day, testing the resistance level of $9,475/t, before closing below at $9,445/t; the cash to 3-month spread strengthened up to $14.50/t. Likewise, SHFE aluminium prices strengthened marginally, closing at CNY68,940/mt. Nickel prices remained marginally supported above $16,100/t before closing at $16,199/t. Lead was seen marginally higher closing at $2,023.50/t.

Oil futures declined after the first US crude supply rise in a month. WTI and Brent edged down to $61.91/bl and $65.91/bl. Precious metals were all higher, with gold and silver trading up to $1,793.00/oz and $26.51/oz respectively.

All price data is from 21.04.2021 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.

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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.