US equities declined yesterday after investors after data was weaker than expected which prompted a risk-off afternoon. US retail sales declined 1.1% M/M with ex-auto M/M sales down 0.4% M/M, however, industrial production M/M grew 0.9% which was above expectations. The dollar firmed and US treasury yields declined, with the US 10 year yield at 1.2517%. Chinese listed stocks in the US came under pressure following crackdowns from Beijing. In Europe, concerns over the spread of the virus prompted stocks to consolidate today but the FTSE 100 managed to firm today. European GDP grew 13.6% Y/Y and 2% Q/Q, with employment gaining 1.8% Y/Y.
The global risk-off sentiment prompted metal prices to decline yesterday, with only tin and lead firming. Copper came under the most pressure with prices breaking through support at $9,300/t to close on the back foot at $9,247.5/t. Nickel prices found support below $19,100/t, which prompted a close at $19,193/t and the cash to 3-month spread tightened into $0.50/t backwardation. The lead cash to 3month spread remains in a steep backwardation at $124.50/ back as the flat price firmed as well today to $2,323/t. Tin continues to rally, and tested resistance at $35,950/t but closed at $35,798/t. Zinc prices edged lower to close at $3,015/t and Ali failed into resistance at $2,640/t and closed at $2,599.50/t.
Energy prices were marginally softer yesterday with WTI and Brent trading at $66.44/bl and $68.92/bl, respectively, at the time of writing. Despite the risk-off sentiment in financial markets, precious metals failed to gain a bid with gold and silver trading at $1,783.01/oz and $23.65/oz, at the time of writing.
Geordie Wilkes, Head of Research
