US stocks rallied after China’s statement to pump more support into the market. As the result, the dollar weakened and the 10yr US Treasury yield edged higher. The ECB indicated it will tolerate higher inflation, implying the loose monetary policy will remain loose for longer. From the trade side, tensions between China and the US continue to rise, as Washington added Chinese entities to the economic blacklist. Chinese PPI rose by 8.8% y/y in June, down from 9.0% in the previous month. Meanwhile, the global chip shortage continued to weigh on UK manufacturing recovery in May, as factory output experienced an unexpected drop.
LME metal prices were well bid yesterday as risk appetite re-emerged. Copper prices were firmer, however lack of appetite for prices above $9,550/t, triggered a close at $9,519.50/t. Nickel prices broke through the resistance of $18,600/t and closed higher at $18,747/t. Zinc prices were also firmer and closed at $2,977/t; cash to 3m spreads tightened up to -$16.50/t. Lead prices opened on the front foot yesterday, breaking through the key resistance level of $2,320/t to close at $2,330.50/t. Aluminium gained the most ground, closing at $2,501.50/t.
Oil futures gained for the second straight day, despite finishing the week on the back foot, as the dollar fell, with WTI and Brent edging up to $74.52/bl and $75.55/bl. Gold poised for the third weekly advance, gaining ground to $1,808.51/oz and silver at $26.13/oz.
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All price data is from 08.07.2021 as of 17:30