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Daily Base Metals Report

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Equity markets rallied as CPI data the U.S. was less than expected at 8.5% Y/Y and M/M data was flat. CPI ex food and energy was 5.9% Y/Y, investors took this as an indication that the Fed will not raise rates as aggressively in September, however there is a high probability that this blip in inflation is short lived as energy and electricity costs are expected to rise significantly in Q4. The USD weakened significantly against most currencies, especially those who will see more rate hikes as traders expect curves to diverge. The US 10yr yield holds around 2.761%, with the UK now at 1.947%.

Metals prices were mixed despite the U.S., copper prices tested $8,100/t and this caused prices to decline back to $8,080.5/t, the days low was $7,889/t and this outlines the change in sentiment since the CPI data. The market saw zinc prices have surged higher once again, with prices closing at $3,608.5/t with the cash to 3-month spread at $97.75/t. Nickel surged higher as well testing $24,550/t, and the market trades around the highs at the time of writing. Aluminium traded sideways today and closed at $2,489.5/t, with the cash to 3-month spread at $6.26/t back. Lead has consolidated since surging higher earlier in the week and closed at $2173.5/t. 

Energy prices edged higher with Brent trading at $96.68/bl after recovering this afternoon as the dollar weakened. WTI has recovered back above $90/bl and technically looks set to push higher.  

All price data is from 10.08.2022 as of 17:30


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