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Daily Base Metals Report

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US stocks retreated on the back of mixed messages of what the future looks like between Russia and Ukraine, with the latter awaiting proof of troop withdrawal from the border. US retail sales rebounded, growing by 3.8% m/m in January, the biggest gain in 10 months, highlighting the persistent appetite for spending despite the spread of omicron through the economy in the first month of the year. Homebuilder sentiment in the US has dropped to a 4-month low in February amid continued pricing pressures, such as labour and supply costs. In the meantime, US factory output rose modestly in January as manufacturers continued to work through the backlog of orders.

Metals were all marginally higher on the day, finding support, partly due to a slower Chinese inflation figure, which should give the central bank more room for further monetary policy easing. Aluminium responded strongly to a possibility of easing tensions from Russia, climbing to test recent highs at $3,260/t; the metal closed at $3,256/t. Aluminium cash to 3-month spread tightened into $40.25/t. Likewise, lead caught a bid today, breaking above $2,330/t to close at 2,338/t. Zinc tested resistance at $3,620/t but struggled above that level and closed lower at $3,584/t. Nickel fluctuated around $23,400/t to close at $23,406/t.

Oil futures recouped yesterday’s losses amid uncertainty on the geopolitical front. WTI and Brent rallied back to $94.80/bl and $95.87/bl. Likewise, precious metals were all moderately higher, with gold and silver at $1,864.96/oz and $23.51/oz, respectively.

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

All price data is from 16.02.2022 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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