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Daily Base Metals Report

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US stocks climbed higher after solid tech earnings outweighed the price growth data coming out today. Both the employment cost index and the personal consumption expenditure price index increased by more than forecast, up by 1.3% and 1.0%, respectively, as they beat new highs, despite growing price pressure. At the same time, the University of Michigan's July reading for longer-term inflation expectations increased slightly, hovering near an 11-year high at 2.9%. The dollar continues to edge marginally lower, and the 10yr US Treasury yield continues to fall, now at 2.62%. Euro-zone inflation beat another record, jumping by 8.9% in July, further increasing the pressures on the ECB to hike again. At the same time, GDP growth expanded in Q2, growing robustly despite market expectations.

Strong gains were seen across the metal complex today as risk-on sentiment took hold. Nickel rallied by more than 7.00% on the day, up to $23,500/t before settling slightly lower at $23,619/t. Zinc jumped higher as the market continued to monitor supply issues, growing for the fourth consecutive day to highs not seen since the start of the month; the metal closed at $3,308.50/t. Aluminium and copper saw broad gains to close at $2,488.50/t and $7,917.50/t, respectively. In the meantime, Chile expects copper prices to recover by the end of the year amid easing concerns surrounding global inflation and the impact of Chinese lockdown measures on demand; it expects prices to average at $4/lb this year.

Oil futures rallied, with WTI jumping back above $100/bl on the back of a tight supply picture. Gold and silver gains were much more moderate at $1,766/oz and $20.29/oz, respectively.

All price data is from 29.07.2022 as of 17:30

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