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European stocks slumped, as the US markets were closed for the day, on the back of growing tensions between Russia and Ukraine. The PCE index is coming out this Friday and is forecast to have grown by 6% in January; this would set the stage for tighter monetary policy from the Fed, further increasing the possibility of a strong rate hike in the first week of March. Elsewhere, UK service PMI recovered quicker than expected in February, up to 60.8, the highest level in 8 months; meanwhile, manufacturing performance continued to soften, yet still remains expansionary at 57.3. In Europe, the IHS Markit pointed to the record jump in prices for goods and services.

Metals on the LME whipsawed today on the back of mixed plans for the summit between Russia and the US. Liquidity was thinner given the absence of American investors. Albeit marginal gains today, nickel continues to outperform other metals in the group, as it tested resistance $24,610/t, the highest point since June 2011, and closed at $24,349/t. Aluminium edged higher, fluctuating around $3,280/t in the second half of the day to close at $3,279.50/t; cash to 3-month spread continued to tighten into $45.25/t. Zinc and lead moved in tandem once again, softening to close at $3,558/t and $2,334/t, respectively. Iron ore futures jumped by 8.8% today after the news that Chinese steel mills resumed production after the Olympics. In the meantime, China is set to plan the implementation of a system through which negotiations of iron ore sales through a state-backed centralised platform, as opposed to negotiating spot prices independently. If implemented, this could further boost control over iron ore prices in the longer run.

Oil futures rose on Monday as the focus has shifted back to strong fundamentals, with robust demand driving the longer-term outlook. WTI and Brent strengthened into $92.17/bl and $95.07/bl. Precious metals fluctuated in line with the changes to geopolitical tensions.

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

All price data is from 21.02.2022 as of 17:30


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