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Daily Base Metals Report

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US stocks pared losses, as fears over the growing number of cases with the new variants intensified once again. US initial jobless claims increased in the week ending July 3rd, though still remained near the pandemic low. The dollar sold off and the 10yr US Treasury yield softened into 1.2962%, February 2021 lows. The 30yr US Treasury yield fell below the 1.90% mark for the first time since February as long-term inflation expectations have eased. Meanwhile, Chinese authorities signalled that they might soon release more support for the economy, a sudden shift in tone that suggests that the recovery might be weaker than previously expected.

Activity on the LME was mostly down yesterday, despite a softer dollar, with lead and nickel closing higher at $2,297/t and $18,334/t respectively. Aluminium was subject to strong selling pressure, falling below the key support level of $2,460/t and closing at $2,442/t; cash to 3-month spread widened out to $12.50/t. Copper prices were softer, closing at $9,323/t. Zinc lost ground in the second half of the day, closing lower at $2,933.50/t.

Oil futures gained ground, ending the three days of decline, as inventories declined, confirming growing demand. WTI and Brent edged up to $72.61/bl and $73.87/bl. Precious metals were all lower, with gold and silver down to $1,798.67/oz and $25.93/oz respectively.

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All price data is from 07.07.2021 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.

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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.