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Daily Base Metals Report

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US stocks rebounded, with investors’ focus still on the Fed statement. The dollar softened and the 10yr US Treasury yield strengthened to 1.4751%. The UK housing market price growth slowed in June as record prices along with a lack of properties deterred investment. The ECB’s Lagarde said stated that the council is having a positive discussion in relation to the biggest overhaul of monetary policy in almost two decades, with results expected to be out by September. Meanwhile, Germany raised its net borrowing to EUR99.7bn next year to bolster economic recovery. EU consumer confidence is out today and is expected to show continued recovery month-on-month.

LME metal prices have all recovered from last week’s sell-off. Aluminium prices were well supported in the second half of the day and tested resistance at $2,410/t and closed just off the highs at $,2403.50/t. Copper was well bid, testing the resistance level of $9,200/t, before closing below at $9,180/t. SHFE copper, however, was lower on the day, closing at CNY66,780/mt. Nickel closed higher on the day at $17,450/t; cash to 3m spread tightened up to -$22.25/t. Zinc and tin consolidated, closing at $2,837/t and $30,079/t respectively. Lead prices strengthened to close at $2,156.50/t.

Oil futures edged higher amid a weaker dollar, with WTI and Brent edging up to $73.31/bl and $74.65/bl. Gold climbed higher, following the biggest weekly decline in over a year, as investors are buying the dip; the metal is now trading at $1,782.04/oz, with silver at $25.97/oz.

All price data us from 21.06.2021 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.