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Daily Base Metals Report

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US stocks tumbled today, driven primarily by disappointing corporate earnings performance from Meta. US service performance slowed significantly in January, as ISM gauge fell to 59.9 from 62.3, as the omicron spread halted the service sector performance. Meanwhile, US jobless claims continued to fall, down to 238,000 in the week ending January 29. US productivity surged by the most in almost a year in Q4 2021; meanwhile, labour costs cooled. The 10yr US Treasury yield strengthened and the dollar sold off to test 95.30. The euro jumped amid concerns about persistently high inflation voiced by the ECB today, prompting markets to price in a more aggressive monetary policy tightening outlook. Meanwhile, BOE hiked its key rate to 0.5% and stated that its emergency support programme will end in March.

Metals prices came under pressure today, with risk appetite suffering from US data, the BOE and ECB. Copper was rangebound across the LME and CMX despite more inventory being withdrawn in LME warehouses; the metal closed at $9,832.50/t. Aluminium reversed yesterday’s activity, pushing back above $3,000/t to close at $3,050/t. Lead and zinc were softer, with lead breaking through support at $2,200/t to close at $2,191.40/t. Nickel consolidated once again, closing at $22,866/t and the cash to 3-month spread widened marginally to settle at $455/t.

Oil futures steadied after the OPEC+ output decision has been confirmed, with WTI and Brent trading at $88.78/bl and $89.90/bl. Precious metals cooled, and gold and silver softened marginally into $1,805.71/oz and $22.44/oz, respectively.

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

All price data is from 03.02.2022 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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