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Daily Base Metals Report

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US stocks softened yesterday, with tech markets leading the decline, following the previous day’s strong gains. The Fed’s hawkishness supported the markets, and while full employment will be important in helping economic recovery, the officials have downplayed the goal somewhat and are likely to execute the three rate hikes without the need to reach full employment first. The dollar recovered yesterday’s losses, and the 10yr US Treasury yield softened further to 1.38%. Elsewhere, Russia raised its key interest rate once more to 8.5% in response to stronger than expected inflation.

Previous day's gains on the LME market have softened somewhat, but general bullishness persists, driven, in large, by the hawkish monetary policy outlook worldwide. Aluminium continued to strengthen on positive demand, closing higher at $2,724.50/t. Nickel was supported above $19,600/t and closed marginally higher at $19,648/t. Zinc, however, softened after jumping to a $3,480/t level on Thursday, closing at $3,387/t. Copper fell back below $9,450/t; the metal closed at $9,437/t. Overall, while trading remains thin closer to the Christmas period, we should continue to see heightened volatility with the rising number of omicron cases in major economies.

Oil futures declined for the first time in three days as the spread of omicron in major economies threatens demand outlook. WTI and Brent fell down to $71.00/bl and $73.54/bl. Precious metals were seen marginally stronger, with gold and silver edging up to $1,805.55/oz and $22.49/oz, respectively.

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

All price data is from 17.12.2021 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.

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