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Daily Base Metals Report

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US stocks showed resistance to the recent sell-off once again, bouncing higher ahead of the Fed meeting where the officials have stated their willingness to accelerate the unwinding of pandemic stimulus and to plan for their first hike to take place in March. In December, US new home sales jumped to a nine-month high as firmer demand for houses continued to deplete inventories. In the meantime, the merchandise-trade deficit widened unexpectedly in December, as imports continued to rise. The dollar and the 10yr US Treasury yield edged higher. Elsewhere, Chinese government spending rose by 0.3% y/y the slowest pace in nearly 20 years in 2021, most likely driven by tight fiscal conditions in the second half of the year.

Metals prices firmed as risk appetite returned ahead of the Fed. Tin was well bid to $42,208/t and has been bid after the close at $42,208/t. Zinc was firm again and closed above $3,610/t at $3,610/t, with the cash to 3-month spread at $19.25/t. Copper prices firmed as well, closing at $9,916.50/t. Aluminium prices consolidated today, with the market focusing on the Fed; the metal closed at $3,094/t. Only lead was lower on the day, closing at $2,322/t.

Oil futures continued to advance on the back robust demand outlook, with WTI and Brent growing to $87.45/bl and $90.05/bl. Gold and silver softened, falling down to $1,832.85/oz and $23.77/oz, respectively.

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

All price data is from 26.01.2022 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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