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Daily Base Metals Report

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US stocks closed the week on a weak footing once again, with S&P 500 falling for the seventh week straight. Despite a deteriorating macro outlook in the US, the markets are still pricing in 50bps from the Fed during its next meeting. The 10yr US Treasury yield and the dollar were marginally unchanged. In the UK, consumer confidence fell to 1970s lows amid rising costs of living and other expenses. The data puts more pressure on the BoE to decide on the trajectory of its next monetary policy decision.

China cut the key interest rate by a record amount to 4.45% to help support the economy, whose recent slump was driven by covid lockdowns. Metal market response to this has been mixed, with the moves mostly unchanged day-on-day, suggesting that investors are questioning the efficacy of such moves from the central bank amid a weak demand backdrop. Only the iron ore futures responded strongly to this, gaining more than 7% day-on-day to close higher at $134.07/mt; the metal has, however, declined on Monday’s trading, erasing half of the gains. Aluminium fluctuated but trended slightly higher today to close at $2,946/t. Likewise, copper edged higher, but the gains were more moderate; the metal closed at $9,422/t. Lead performance was stronger, gaining above the resistance of $2,140/t to close at $2,160/t. Nickel and zinc weakened, closing at $27,973/t and $3,707/t, respectively.

Finland is said to have lost access to Russian gas shipments after the nation refused to pay for imports in rubles, making it the third country to have its shipments cut by Russia. Oil futures edged higher as the demand-supply balance remains tight, pushing WTI and Brent to $112/bl. Precious metals were mixed, with gold and silver trading at $1,843/oz and 21.76/oz, respectively.

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

All price data is from 20.05.2022 as of 17:30


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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.

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