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Daily Base Metals Report

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US stocks edged higher following the growing consensus that inflation is nearing its peak and that the pricing in of rate hikes might be excessive. Netflix slumped 30% after the company reported its first customer loss in more than a decade; the biggest drivers behind this were the loss of Russian customers as well rising subscription costs elsewhere. Indeed, there is a trend in households cutting down on subscription-type services to save money, a trend we are likely to see in other non-essential expenses as prices continue to rise. The 10yr US real Treasury yield turned positive for the first time since 2020, signalling a potential return to the pre-pandemic levels; the nominal yield continued to climb, testing March 2018 high of 2.97%. The dollar weakened down to 100. Elsewhere, the ECB’s governing council member Kazaks said that an interest rate hike could take place as soon as July amid continued price pressures.

Mostly a down day on the LME today, apart from aluminium, which gained some ground to close at $3,269/t. Zinc saw the strongest losses as the metal struggled to break above the psychological level at $4,500/t, closing at $4,418/t. Nickel followed suit, closing at $33,505/t. Copper and lead both saw a marginal declines, closing at $10,223/t and $2,424/t. Chinese banks decided to keep the lending rates unchanged once again, with the 1yr loan prime rate held at 3.7%, as the PBoC remains cautious about weakening currency. The scope for China’s easing continues to diminish as the Fed’s aggressive tightening cycle approaches, creating little space to manoeuvre the trajectory of future policy decisions.

Oil fluctuated as US crude stockpiles pointed to the biggest withdrawal since 2021. WTI and Brent are trading at $102.60/bl and $106.73/bl, at the time of writing. Likewise, precious metals wavered, with gold and silver marginally unchanged at $1,950/oz and $25.08/oz, respectively.

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

All price data is from 20.04.2022 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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