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Daily Base Metals Report

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US stocks fell yesterday, led by energy and industrial shares, as prevailing threats of inflation swayed the markets. The 10yr Treasury yield edged higher to 1.6289%, and the dollar weakened as a result. Job openings in the US surged to a record high of 8.12m in March, and the number of vacancies exceeded hires by more than 2m, evident to current hiring challenges. Meanwhile, the US home prices surged by the most in Q1 2021, as the number of buyers exceeded the available inventory, supported by low mortgage rates. Elsewhere, German investor confidence jumped to the highest level in more than 21 years, as the country’s inoculation programme is gaining pace. US CPI data is out today and is expected to grow at 3.6% in April, vs 2.6% in March.

Metals on LME were mostly higher yesterday, apart from aluminium, which closed lower on the day at $2,521/t. Copper traded near the previous-day record, close marginally higher at $10,460/t. SHFE copper was also higher on the day, closing at CNY66,690/mt. Nickel prices tested $18,000/t in the second half of the day but struggled above that level and closed at $17,936/t. Zinc was well bid, breaking above the resistance level of $3,020/t and closing lower at $3,009/t. Lead was range-bound, closing higher at $2,222/t; cash to 3m spread widened out to -$20.75/t. Iron ore futures softened to close at $221.07/mt.

Oil futures dipped on the back of reopening of one of the largest pipelines in the US back from the cyberattack last week. WTI and Brent remained marginally unchanged at $64.90/bl and $68.32/bl. Precious metals were mixed, gold edged lower to $1,834.90/oz, while silver consolidated to $27.53/oz.

All price data is from 11.05.2021 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.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

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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.