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Daily Base Metals Report

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US stocks fell following a disappointing economic data release, with investors bracing for one of the most aggressive rate hikes. The Fed has hiked the rates by 50bps, in line with market forecasts, and stated that similar moves will follow. The US stocks responded well, growing up by nearly 3%, the best one-day rally since November 2020. US service providers’ growth eased in April, with cost pressures continuing to dampen the sentiment. In the meantime, Europe set out a plan to ban Russian crude oil purchases over the next six months, with countries such as Hungary seeing increased deadlines for sanctions until the end of next year. The BOE is scheduled for tomorrow, and the central bank is expected to hike by 25bps to 1.00%.

Metals on the LME were mixed today as investors await the commentary from the Fed before assessing their demand outlook. This is despite the EU introducing a new wave of sanctions against Russia today. Indeed, the bloc Europe set out a plan to ban Russian crude oil purchases over the next six months, with countries such as Hungary seeing increased deadlines for sanctions until next year. The market response suggests market’s anticipation of such move, following days of debates between the members of the bloc. Lead gained footing, edging higher to test resistance of $2,320/t before closing at $2,280/t. Aluminium was also seen higher today, with the metal closing at $2,953/t. Copper fluctuated but managed to close marginally higher at $9,473.50/t. Nickel and zinc were the only once struggling to gain ground, with both metals closing at $30,638/t and $3,965/t, respectively.

Oil futures strengthened during the day, with WTI and Brent rallying to $105.80/bl and $108.30/bl. The strength of the move was not as robust as have seen in previous weeks following the first wave of sanctions from the developed economies. Precious metals’ performance was mixed, with gold and silver trading at $1,869/oz and22.40/oz, respectively.

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

All price data is from 04.05.2022 as of 17:30


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