1. Reports
  2. Daily Base Metals Report
Non-independent Research

Daily Base Metals Report

Read disclaimer

US stocks fluctuated as investors continued to respond to the Fed’s decision to begin to taper this month. The 10yr US Treasury yield softened into 1.5310%, as markets are no longer pricing in some of the rate hikes in 2022, after the Fed alluded to keeping interest policy unchanged in the meantime; the dollar rallied. US initial jobless claims fell to 269,000 in the week ending October 30, the lowest since March 2020; tomorrow’s job report is forecast to increase up to 450,000, after a lacklustre 194,000 growth in the previous month. US productivity fell by the most since 1981 in Q3 2021, as the economy fared the worst wave of lockdown restrictions. The pound sold off after the BoE decided not to hike interest rates as was previously anticipated, whilst also cutting the 2022 growth outlook to 5%, down from 6%.

Metals weakened on the LME market yesterday after China cancelled its preferential electricity prices in some provinces, such as Yunnan. Aluminium sold off to test the support level at $2,550/t before closing marginally higher at $2,554.50/t. Copper was stronger in the first half of the day, but selling pressures prevailed, pushing the metal below $9,500/t support level down to close at $9,439/t. Zinc was another strong seller after it tested resistance at $3,373/t; the metal closed at $3,240.50/t, and the cash to 3-month spread tightened marginally into $45/t. Nickel and lead were mostly range-bound but closed lower on the day at $19,141/t and $2,348/t.

Oil futures rebounded in the second half of the day as the OPEC+ rejected the need for higher oil output, approving a 400k b/l production hike in December. This resulted in the futures being broadly unchanged on the day, with WTI and Brent trading at $80.96/bl and $82.39/bl. Precious metals gained ground, with gold and silver edging up to $1,792.88/oz and $23.87/oz, respectively.

For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.

All price data is from 04.11.2021 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.

Sign-up to get the latest Non-independent research

We will email you each time a new report has been published.

You might also be interested in...

Daily Report FX

A morning report covering fundamentals and technicals for USD, EUR, GBP, JPY, and CHF.

Daily Report Softs Technical Charts

Technical analysis and charts for the key sugar, cocoa and coffee contracts.

Weekly Report FX Options

Commentary and analysis covering OTC currency option pricing, volatility and positioning.

FX Monthly Report November 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs, this month we focus on Turkey. Inflation continues to rise and the Central Bank cut rates, as the Fed starts to become hawkish. The report includes a macroeconomic overview as well as desk comments and technical analysis on key currency pairs.

Quarterly Metals Report – Q4 2021

The global macro picture is starting to present some downside risks in the near term as China's economy is set to slow further and supply-chain bottlenecks continue to cap growth. New orders and new export orders in China are contractionary, and we expect demand in Q4. Order backlogs and lead times for products will continue in Q4, limiting growth, and real consumption is weaker than it looks. Higher costs from shipping, raw materials and energy will take their toll on the consumer, and we expect end-user demand to suffer. The final piece of the jigsaw is the reduction in stimulus from central banks and how that will impact financial markets, bond yields, and the dollar has rallied while stocks corrected, but what will this trend continue?