1. Reports
  2. Daily Base Metals Report
Non-independent Research

Daily Base Metals Report

Read disclaimer

US stocks sold off ahead of the Fed meeting this week as it aims to quell inflation without plunging the economy into recession. VIX is pricing more uncertainty in the near term than in 3 months’ time. The 10yr US Treasury yield jumped to 3.35%, while the 2-year jumped to the rates not seen since the financial crisis 2008. At the same time, the measure of US credit risk surged to the highest since May 2020. The dollar found resistance at 105. Traders are now pricing a 75bps hike in the next meetings, but the central bank is most likely to hike rates twice by 50bps in the next two meetings. Elsewhere, the pound continues to 1.21 under pressure as the risk of a trade war with the EU intensifies. Additionally, the UK economy shrank unexpectedly, falling by 0.3% m/m, and the sharpest pace in more than a year as the government wound down covid-19 testing.

Metals began the week on the back foot after Friday’s inflation data and a lack of demand coming from China. Tin fell more than 7% to close at $32,895/t. Nickel followed suit, breaching support at $26,000/t to close at $25,929/t. Both copper and aluminium declined to multi-month lows, with the latter falling to the levels not seen in six months; both metals closed at $2,638/t and $9,294/t, respectively. Ecuador and Chile have resumed communications over a partnership to develop a major copper deposit. Codelco agreed to suspend two arbitration processes over the Imbabura project, which is conducive to negotiating environment. In the meantime, aluminium on-warrant stocks continue, falling to 186,475, the series lows. Lead and zinc closed lower at $2,098/t and $3,613.50/t, respectively.

Oil futures managed to erase earlier losses, with WTI and Brent trading at $120/bl and $122/bl. Precious metals declined on the back of strong inflation data, with gold and silver trading at $1,830/oz and $21.27/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 13.06.2022 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.

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.

Sign-up to get the latest Non-independent research

We will email you each time a new report has been published.

You might also be interested in...

Daily Report FX

A morning report covering fundamentals and technicals for USD, EUR, GBP, JPY, and CHF.

Daily Report Softs Technical Charts

Technical analysis and charts for the key sugar, cocoa and coffee contracts.

Weekly Report FX Options

Our FX Options Report contains commentary and analysis covering OTC currency option pricing, volatility and positioning. 

Quarterly Metals Report – Q3 2022

Our analysts provide an in-depth analysis of the metals market and current macroeconomic conditions. The environment has weakened significantly as growth fears rise amid persistent high inflation. Central banks are data-dependent, which could mean they slow rate hikes as growth starts to slow. This has meant a downside to the US 10yr yield, but also we see a downside to rate hikes in Q4. Europe will likely enter a recession before the US and take longer to recover, but material availability is significantly lower, shown by low inventories.

FX Monthly Report June 2022

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we look into the JPY and the pressure the BOJ is under to change their monetary policy as JPY continues to weaken against major currencies. Economic data is weakening and inflation is less of a problem in Japan, but yields continue to test the cap.