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Daily Base Metals Report

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US stocks closed the week on a better note after a couple of Fed officials stated that a 100bps hike this month is unlikely. The 10yr US Treasury yield remained at 2.91%; the dollar softened marginally to 107. US consumer inflation expectations in 5 to 10 years declined in early July by more than forecast to a 1-year low of 2.8%. The NY Fed’s Empire manufacturing gauge beat expectations, while industrial production declined. In the meantime, US retail sales increased by 1.0% m/m in June, more than forecast, suggesting reliant consumer spending habits despite rising inflationary pressures; categories such as furniture and e-commerce saw moderate increases. Regardless of positive market data, consumer sentiment remains low and is unlikely to increase sharply any time soon. The probability of recession continues to grow, and according to the Bloomberg survey, the chance of a recession within the next year increased to 47.5%.

Metals on the LME recovered some of yesterday’s losses today, despite the disappointing Chinese growth figure released earlier. Chinese economy missed out on its growth expectations for the second quarter, as it fell to 0.4%, vs a strong start of 4.8% y/y. Other indicators, however, beat expectations in June, with retail sales and industrial production increasing by 3.1% y/y and 3.9%, respectively. Lead recouped most of yesterday’s losses, as it grew by 5% to close at $1,944/t. Zinc was also seen higher, closing at $2,915/t. Aluminium and copper fluctuated throughout the day, finding support at $2,310/t and $6,950/t before edging back up to close at $2,343/t and $7,190.50/t, respectively. Nickel gains were broadly unchanged as the metal closed at $19,385/t.

Oil futures gained some footing in the latter part of the day, however, still closed the week 9.0% lower. WTI and Brent now trade at $98/bl and $101/bl. Precious metals fluctuated, with gold and silver marginally unchanged at $1,706/oz and $18.66/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 15.07.2022 as of 17:30


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