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Daily Base Metals Report

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U.S. stocks continued to recover after the Fed statement last night. The markets are now factoring in five rate hikes this year after the policymakers said that the economy and the labour market could withstand a faster pace of tightening if warranted. US GDP jumped by an annualised 6.9% in Q4 2021, more than forecast, adding further positive momentum to the outlook. In the meantime, initial jobless claims fell to 260,000 in the week ending January 22, the first weekly decline in a month, a sign that the labour market might continue to recover after being stalled by the spread of omicron. The dollar jumped to 97.20, and the 10yr U.S. Treasury yield softened.

After a hawkish Fed, metals came under pressure as the prospect of weaker growth weighed on the market. Copper prices slid to $9,784.50/t, closing at $9,782/t; cash to 3s are still in a backwardation, which tightened to $48/t. Nickel edged lower, closing at $22,398/t. Zinc was marginally stronger today and holds above $3,600/t, closing at $3,630.50/t. Aluminium edged higher today and held above $3,100/t to close at $3,098.50/t.

Oil rally paused on the back of strong dollar, with WTI and Brent rangebound. Gold and silver sold off, falling to $1,794.91/oz and $22.73/oz, respectively.

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

All price data is from 27.01.2022 as of 17:30


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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.

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