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Daily Base Metals Report

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US stocks declined, led by the sell-off in tech shares after markets assessed mixed data coming out of the US. The labour data showed that while non-farm payrolls decreased, adding only 199,000 workers in December, the wages jumped to 4.7% y/y, an indicator that the Fed will watch closely in regards to its decision making in the meetings this year. Overall, the unemployment level being below the Fed’s target and wage growth would bring the rate hikes closer than expected. As a result, the 10yr US Treasury yield climbed to 1.8%, and the dollar declined. Elsewhere, Europe’s CPI jumped by 5% y/y in December, an unexpected rise given the rise of COVID-19 restrictions given the spread of omicron. This should also put additional pressures on ECB that is seen to be less hawkish in comparison to the US.

Sentiment on the LME was mixed with aluminium and lead edging lower. The rest of the metals complex gained ground with tin and nickel performing the best. Tin continues to test appetite at $40,000/t after a fire in a semiconductor factory in Europe may provide further pain for the semiconductor industry; the metal closed at 39,826/t. Nickel continues to perform well, as it found support above $20,500/t, closing higher at $20,734/t. Copper consolidated, closing at $9,647/t; cash to 3-month spread shot up to $45/t. Aluminium weakened to close at $2,914.50/t.

Oil futures closed higher for the third straight week, driven by tight market conditions. WTI and Brent traded at $79.15/bl and $81.90/bl. Precious metals fluctuated, with gold and silver wavering around $1,791.32/oz and $22.23/oz, respectively.

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

All price data is from 07.01.2022 as of 17:30


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