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Daily Base Metals Report

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US stocks declined as investors refocused their attention on growth prospects following the move by the ECB to end the bond purchasing programme. Additionally, Lagarde stated the central bank’s intention to hike rates by 25bps during its next meeting in July, and if the inflationary data remains high, a hike of bigger magnitude in September would not be excluded. The tightening path that Europe chose to take differs from the Fed, with the latter hiking aggressively and then moderating the scale of increases later on in the year; another 50bps hike could be warranted this month depending on the inflation data coming out tomorrow. The Italian 10y bond yield shot up to 3.6%. Treasuries followed suit, with the 10yr yield holding above 3.00%. The dollar tested the 103 level. Elsewhere, China’s exports surged in May, growing by 16.9% y/y in dollar terms, as the easing of lockdown restrictions allowed factories and ports to ship out the backlog.

Metals’ sentiment soured after Shanghai stated the re-introduction of some lockdown restrictions in provinces that saw a spike in COVID cases. Nickel saw the strongest losses as the metal gapped lower on the open and has maintained trading until the close of $28,023/t. Aluminium followed suit after testing resistance at $2,851/t before coming down to close at $2,761/t. The easing of restrictions earlier in May benefitted the flow of material significantly, with China shipping a record volume of aluminium, around 676,600 tonnes, but exports in the coming months could subside given the waning global demand. Lead and zinc closed lower at $2,196/t and $3,762/t, respectively.

Oil futures wavered around $122/bl on the back of renewed lockdown restrictions in China. Precious metals fell in line with the broader markets, gold and silver edged lower into $1,845/oz and $21.71/oz, respectively.

For more in-depth analysis of base and precious metals, our Q2 2022 Quarterly Metals report is out now!

All price data is from 09.06.2022 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.

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