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Daily Base Metals Report

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US stocks weakened today, but not enough to erase the previous day’s gains as investors await the minutes from the central bank and a possibility of a ban on coal exports from Russia by the EU. The Fed’s Governor Brainard stated that the policymakers would continue to tighten monetary policy and shrink the balance sheet as soon as May. The 10yr US Treasury yield rose for the third straight day to a 3-year high of 2.56% as a result; the focus on the yield inversion prevails in the broad Treasury market and its consequences on the economic outlook. Likewise, the dollar jumped higher to $99.32. In the meantime, according to the Goldman Sachs gauge, the US labour market is now the tightest since WWII, further stoking the speculation of aggressive interest rate tightening.

Metals fluctuated once again today, with hawkish Fed comments offsetting the news of a complete lockdown in Shanghai. Indeed, Shanghai extended its containment measures to the entire city, causing near-complete isolation of the country’s financial hub. Aluminium gained footing, testing resistance at $3,515/t before edging lower to close at $3,465/t. Copper was mostly range-bound, trading at $10,484/t before closing at $10,455/t. Nickel saw moderate declines as the metal closed at $33,312/t. Zinc and lead closed at $4,296.50/t and $2,428/t, respectively.

Oil futures declined during the day, however, still managed to settle in unchanged day-on-day, following the EU’s statement that sanctions will stay clear of oil, as attention shifted to coal. WTI and Brent traded at $103.26/bl and $107.39/bl. Precious metals softened marginally, gold and silver fell to $1,927/oz and $24.43/oz, respectively.

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

All price data is from 05.04.2022 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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