четверг, 31 мая 2018 г.
METALS MORNING VIEW 31/05: Rebound in Chinese manufacturing PMI bodes well for metals prices
China’s manufacturing purchasing managers’ index (PMI) for May surprised to the upside at 51.9, having been expected to remain at April’s level of 51.4, though the positivity surrounding this release has yet to filter through to base metals prices on the London Metal Exchange.
Three-month base metals prices on the LME were for the most part little changed during morning trading on Thursday May 31. Copper, aluminium and tin were up by 0.1%, with the red metal at $6,848 per tonne, zinc prices were up by 0.4%, while lead and nickel were down by 0.1% and 0.3% respectively.
Volume has been average with 3,952 lots traded as at 04:49 am London time.
This follows a generally firmer day on Wednesday when the complex closed up by an average of 0.8%, which was led by a 2.2% rebound in zinc prices, while aluminium prices struggled with a 0.1% loss.
The precious metals this morning were firmer with gold and silver prices up by 0.1%, with spot gold at $1,302.77 per oz, and platinum and palladium prices up by 0.2%. On Wednesday, gold and platinum prices were up by 0.1% and 0.2% respectively, while silver and palladium prices were more bullish with gains of 0.9% and 1% respectively.
In China, base metals prices on the Shanghai Futures Exchange were diverging, with aluminium prices down by 0.5%, copper prices off by 0.1% at 51,290 yuan ($7,985) per tonne, while the rest were positive: nickel (+2.0%), zinc (+1.2%), lead (+0.3%) and tin (+0.2%).
Spot copper prices in Changjiang were unchanged at 51,050-51,170 yuan per tonne and the LME/Shanghai copper arbitrage ratio was weaker at 7.50, after 7.55 on Wednesday.
In other metals in China, iron ore prices were up 0.5% at 463 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were up by 0.9%, while gold and silver prices were up by 0.1% and 0.5% respectively.
In wider markets, spot Brent crude oil prices were down by 0.5% at $77.44 per barrel this morning, this after a strong rebound on Wednesday. The yield on US 10-year treasuries was firmer at 2.8477%, as was the German 10-year bund yield at 0.3492%.
Equity markets in Asia were in recovery mode on Thursday: Nikkei (+0.72%), Hang Seng (+0.75%), CSI 300 (+1.56%), the ASX 200 (+0.47%) and Kospi (+0.57%). This follows a stronger performance in western markets on Wednesday, where in the United States the Dow Jones closed up by 1.26% at 24,667.78, and in Europe where the Euro Stoxx 50 closed up by 0.38% at 3,441.19.
The dollar index was little changed at 94.07, this after retreating on Wednesday to 94.09 from Tuesday’s high of 95.03. Resistance has held at 95.15 – the peak from October last year. Given the pullback in treasury yields this week, it is not too surprising the dollar has given back some ground, it also suggests some reduction in haven concerns over Italy’s political impasse where efforts are underway to form another government.
Most of the other major currencies that have been weaker on the back of the dollar’s strength are rebounding this morning: euro (1.1663), sterling (1.3302), the Australian dollar (0.7559), while the yen (108.77) that has been strong alongside the dollar is consolidating.
The yuan (6.4065) has also started to rebound, as have the rupiah, rand and ringgit, while the peso, rupee and Real are consolidating.
Today’s economic agenda is busy. Data out already showed Japan’s industrial production was up by 0.3% in April, after a 1.4% rise previously, and China’s non-manufacturing PMI edged higher to 54.9 from 54.8.
Data out later includes Japan’s housing starts, UK house price index, French consume price index (CPI), Italian monthly unemployment report, UK lending data, EU and Italian CPI and the EU unemployment rate. US data includes Challenger job cuts, initial jobless claims, personal income, spending and consumption expenditure, Chicago PMI, pending home sales and natural gas and crude oil inventories.
In addition, there is a G7 meeting and US Federal Open Market Committee members Raphael Bostic and Lael Brainard are speaking.
Copper prices bounced on Wednesday ahead of testing support at $6,710 per tonne – the low was $6,727 – and prices are now back in the sideways trading range that runs either side of the 20-day moving average at $6,860 per tonne.
Likewise, lead prices are now consolidating having dipped recently, zinc prices are continuing to rebound along with tin. Nickel continues its steady climb, while aluminium prices are little changed as they move sideways.
The pick-up in Chinese manufacturing PMI bodes well, but with a considerable amount of data out on Thursday and more PMI data and the US employment report out on Friday, the markets may delay making their mind up until they see all the data.
Gold prices are consolidating above $1,300 per oz and the weaker dollar seems to be helping in that regard. Silver, platinum and palladium are also consolidating. The complex seems to be waiting for fresh direction; for gold, this will probably come from the dollar and US treasury yields.
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среда, 30 мая 2018 г.
вторник, 29 мая 2018 г.
воскресенье, 27 мая 2018 г.
пятница, 25 мая 2018 г.
четверг, 24 мая 2018 г.
среда, 23 мая 2018 г.
METALS MORNING VIEW 23/05: Metals stuck sideways; manufacturing PMI data in focus
Three-month base metals prices on the London Metal Exchange were mixed on the morning of Wednesday May 23, with nickel and lead prices down by 0.4% and 1.4% respectively, while copper was off by 0.5% at $6,929 per tonne; aluminium and tin are both up by 0.2% and zinc is up by 0.5%.
Volume on the LME has been average with 5,074 lots traded as of 6.56am London time.
This follows a diverse performance on Tuesday when aluminium, zinc and tin closed down by an average of 0.7% and the rest of the complex closed up by an average of 0.6% – the two large movers being zinc that closed down by 1.9% and lead that closed up by 2.1%, which suggests a long zinc / short lead straddle trade is being unwound. The zinc-lead spread has narrowed to $581 per tonne from a peak of $1,035 per tonne in February.
Precious metals prices are little changed with gold, silver and platinum prices all off by 0.1% with spot gold at $1,290.43 per oz, while palladium prices are up by 0.2%. This follows a generally quiet session on Tuesday, although platinum prices did rebound 0.8% to $905 per oz.
In China, copper prices on the Shanghai Futures Exchange were up by 0.5% at 51,750 yuan ($8,115) per tonne, lead and tin prices are both up by 0.1%, while aluminium, zinc and nickel are off 0.6%, 0.9% and 1.1% respectively.
Spot copper prices in Changjiang were up by 0.7% at 51,530-51,680 yuan per tonne and the LME/Shanghai copper arbitrage ratio has firmed to 7.47, from 7.46 on Tuesday.
In other metals in China, the ferrous metals continue to head lower with iron ore prices down by 1.1% at 454.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 1.9%, while gold and silver prices were up by 0.1% and 0.2% respectively.
In wider markets, spot Brent crude oil prices were down by 0.35% at $79.13 per barrel this morning. The yield on US 10-year treasuries has eased slightly to 3.0491% and the German 10-year bund yield has firmed to 0.54%.
Equity markets in Asia were for the most part weaker on Wednesday: Nikkei (-1.18%), Hang Seng (-1.01%), CSI 300 (-0.98%), the ASX 200 (-0.16%), but the Kospi climbed 0.46%. This follows a mixed performance in western markets on Tuesday, where in the United States the Dow Jones closed down by 0.72% at 24,834.10, and in Europe where the Euro Stoxx 50 closed up by 0.41% at 3,587.25.
The dollar index, at 93.73, is edging higher again, albeit still below Monday’s peak of 94.06. On the charts, there is likely to be resistance between 94.22 and 95.15.
The euro and sterling still look heavy at 1.1756 and 1.3399 respectively, the Australian dollar at 0.7543 is giving back more of Monday’s gains, although the yen is firmer at 110.38.
The yuan at 6.3786 is consolidating near recent lows. The Asian emerging market currencies we follow remain weak, while the peso, Real and rand have got some lift off recent lows.
Today’s economic agenda is busy with flash PMI data out across most regions. In Japan, manufacturing PMI fell to 52.5 from 53.8 and all industries activity was flat after a 0.4% rise. In addition to the PMI data, there is data on UK PPI, CPI, HPI, RPI and realized sales. Other data includes EU consumer confidence, US new home sales and crude oil inventories, In addition, there is the release of the Federal Open Market Committee meeting minutes.
The base metals continue range-trading, with lead and nickel the ones with some upward direction, while the rest are heading flat-to-lower, suggesting generally balanced supply and demand. Without stronger economic growth the sideways trading is likely to continue, so today’s flash PMI data is likely to be watched closely for any signs of an economic pick-up or slowdown.
Gold prices have found support above $1,280 per oz and are consolidating either side of $1,290 per oz, platinum prices have also run into dip-buying, while silver and palladium prices have held up relatively better. The gold/silver ratio has pulled back to 78 from April’s highs above 82.
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вторник, 22 мая 2018 г.
METALS MORNING VIEW 22/05: Metals prices consolidate after Monday’s gains
Three-month base metals prices on the London Metal Exchange were little changed to weaker on the morning of Tuesday May 22, with prices down by an average of 0.3%.
This was skewed, however, by losses of around 0.6% in aluminium, nickel and zinc. Copper was off by 0.1% at $6,894 per tonne.
Volume on the LME has been average with 5,183 lots traded as at 07.02 am London time.
This follows a strong performance on Monday when the complex closed with average gains of 1%, led by a 3.4% rise in lead prices.
Gold and silver prices were both down by 0.2% this morning, with spot gold prices at $1,290.84 per oz, while platinum prices have rebounded by 0.2% and palladium prices were little changed. This follows scant movement for gold on Monday, while the more industrial precious metals climbed between 0.5% for silver and 2.9% for palladium.
In China, lead prices on the Shanghai Futures Exchange were up by 2.2%, copper and tin prices were up by 0.4% and 0.5% respectively, with the former at 51,470 yuan ($8,058) per tonne, while aluminium, zinc and nickel prices were off by around 0.3%.
Spot copper prices in Changjiang were up by 0.1% at 51,190-51,330 yuan per tonne and the LME/Shanghai copper arbitrage ratio has slipped to 7.46, from 7.50 on Monday.
In other metals in China, iron ore prices were down by 3% at 454 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 0.8%, while gold and silver prices were up by 0.1% and 0.3% respectively.
In wider markets, spot Brent crude oil prices were little changed at $79.42 per barrel this morning. The yield on US 10-year treasuries remains firm at 3.0550%. Meanwhile, the German 10-year bund yield has eased to 0.5270%.
Equity markets in Asia were weaker on Tuesday: Nikkei (-0.19%), Hang Seng (closed), Kospi (closed), CSI 300 (-0.92%) and the ASX 200 (-0.7%). This follows a mixed performance in western markets on Monday, where in the United States the Dow Jones closed up by 1.21% at 25,013.29, and in Europe where the Euro Stoxx 50 closed down by 0.03% at 3,572.57.
The dollar index at 93.62 is consolidating Monday’s gains that saw the index climb to a high of 94.06. On the charts there is likely to be resistance between 94.22 and 95.15.
The euro’s slide has paused for now at 1.1772, sterling remains weak at 1.3417, as does the yen at 111.06, while the Australian dollar is firmer at 0.7588.
The yuan at 6.3739 is consolidating and the emerging market currencies we follow are also consolidating after recent weakness.
Today’s data releases included Japan’s core consumer price (CPI) that climbed 0.5%, which was down from 0.7% previously. Later there is data on UK inflation, public sector borrowing and industrial order expectations, there is a German Bundesbank monthly report, data on China’s leading indicators and the United States’ Richmond manufacturing index. In addition, UK Monetary Policy Committee (MPC) member Gertjan Vlieghe is speaking.
The base metals are for the most part giving back some of the gains they made on Monday, so rangebound trading continues. Nickel and lead seem to be the two metals with most direction, with the latter supported after the arbitrage window into China opened. The strong dollar is likely to remain a headwind, but the market as a whole does seem to be waiting for direction. For now economic data generally shows growth but not strong growth, so we expect more sideways trading.
Gold prices have found support above $1,280 per oz, with underlying tails on the candlestick charts suggesting dip-buying. The fact gold prices have suffered in recent weeks when geopolitical tensions have at times been high, highlights that it is the strong dollar and upward trending US treasury yields that are the main drivers of gold prices. For now, the path of least resistance looks set to remain to the downside. Silver prices are holding up better than gold prices, as are palladium prices, while platinum prices also ran into dip-buying on Monday.
The post METALS MORNING VIEW 22/05: Metals prices consolidate after Monday’s gains appeared first on The Bullion Desk.
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понедельник, 21 мая 2018 г.
METALS MORNING VIEW 21/05: Metals prices mainly firmer after US-China trade war avoided
Base metals prices on the London Metal Exchange were firmer on the morning of Monday May 21, with prices up by an average of 0.4%. Lead was out in front with a 0.9% rise, while copper was up by 0.6% at $6,864 per tonne.
Volume on the LME has been above average with 8,214 lots traded as at 07.54 am London time.
This follows a mixed performance last Friday where the metals were either little changed or weaker, with aluminium and lead off by 1.1% and 1.2% respectively.
Gold, silver and platinum prices were weaker this morning, with prices down by an average of 0.7%. Spot gold prices were down by 0.8% at $1,283.07 per oz, while palladium prices bucked the general weakness with a 0.6% gain.
The base metals prices on the Shanghai Futures Exchange were generally stronger with aluminium and nickel prices down by 0.4% and 0.2% respectively, while the others were up by between 1.6% for lead and 0.4% for copper, the latter of which was recently quoted at 51,430 yuan ($8,062) per tonne.
Spot copper prices in Changjiang were up by 0.4% at 51,150-51,310 yuan per tonne and the LME/Shanghai copper arbitrage ratio was firmer at 7.50.
In other metals in China, iron ore prices were down by 3.2% at 465 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 1.7%, while gold and silver prices were down by 0.1% and 0.5% respectively.
In wider markets, spot Brent crude oil prices were up by 0.38% at $78.93 per barrel this morning. The yield on US 10-year treasuries remains firm at 3.0577%. Meanwhile, the German 10-year bund yield has eased to 0.5590%.
Equity markets in Asia were mainly positive on Monday: Nikkei (+0.31%), Hang Seng (+0.82%), Kospi (+0.20%), CSI 300 (+0.47%), but the ASX 200 was down by 0.05%. This follows a mixed performance in western markets on Friday, where in the United States the Dow Jones closed up by 1.11 points at 24,715.09, and in Europe where the Euro Stoxx 50 closed down by 0.51% at 3,573.76. Avoidance of a trade war between the United States and China seems to be underpinning the firmer tone in equities.
The dollar index at 94.02 is climbing again and on course to reach our next target at 95.00.
The other major currencies are weaker as a consequence of the stronger dollar: Euro (1.1723), sterling (1.3411), the Australian dollar (0.7509) and the yen (111.35).
The yuan is also weakening (6.3916), as are the emerging market currencies we follow.
Today’s economic data included data on UK house prices, which climbed 1% and Japan’s trade balance increased to a 550 billion yen ($4.96 billion) surplus, boosted by strong car exports to the US. Later there is a European Central Bank financial stability review and US Federal Open Market Committee Raphael Bostic is speaking.
The base metals generally remain rangebound, volumes have picked up and on balance the mood is more positive this morning helped by the easing trade tensions between China and the US. The strong dollar is likely to remain a headwind, but the market does seem to be waiting for direction. For now economic data generally shows growth but not strong growth, so we expect range trading to continue.
Gold prices, along with the other precious metals, are under pressure from the strong dollar and upward trending US treasury yields. The path of least resistance looks set to remain to the downside.
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пятница, 18 мая 2018 г.
METALS MORNING VIEW 18/05: Nickel and aluminium prices have direction; rest are listless
Base metals prices on the London Metal Exchange were diverging on the morning of Friday May 18.
The main movers were nickel, which climbed 1%, and aluminium, which dropped 0.6%. Zinc prices are down 0.3% while the rest are little changed, with copper prices at $6,869 per tonne.
Volume on the LME has been below average, with 3,276 lots traded as at 06.46 am London time.
This follows a mixed performance on Thursday where the main movers were nickel and lead, which both made gains of 1%, while aluminium prices dropped by 0.9%.
Gold, silver and platinum prices are little changed this morning, with spot gold prices off by 0.1% at $1,289.88 per oz, while palladium prices have recovered 0.4%, having dropped by 1% on Thursday. The strong dollar and US yields, no doubt, are still dominating over increased geopolitical tension.
The base metals prices on the Shanghai Futures Exchange were mixed with copper, lead and nickel prices up by 0.4%, 0.6% and 1.5% respectively with copper prices at 51,290 yuan ($8,053) per tonne, while aluminium and tin prices were down by 0.6% and zinc prices were down by 0.1%.
Spot copper prices in Changjiang were up by 0.1% at 50,970-51,070 yuan per tonne and the LME/Shanghai copper arbitrage ratio is at 7.46.
In other metals in China, iron ore prices were down by 0.6% at 478.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 1.3%, while gold prices were off by 0.1% and silver prices were up by 0.2%.
In wider markets, spot Brent crude oil prices were weaker at $79.49 per barrel this morning, having been above $80 per barrel on Thursday. The yield on US 10-year treasuries continues to climb and was recently quoted at 3.1085%. Meanwhile, the German 10-year bund yield has eased to 0.63%.
Equity markets in Asia were mixed on Friday: Nikkei (+0.33%), Hang Seng (+0.25%), Kospi (+0.46%), CSI 300 (-0.06%) and the ASX 200 (-0.13%). This follows a mixed performance in western markets on Thursday, where in the United States the Dow Jones closed down by 0.22% at 24,713.98, and in Europe where the Euro Stoxx 50 closed up by 0.82% at 3,592.18.
The dollar index, at 93.41 remains strong but is consolidating having set a high on Wednesday at 93.64 – the brief pullback between May 10 and May 14, appears to have just been a pause in the rally, with 95.00 now the upside target.
The other major currencies that had been weakening after the dollar strengthened were generally consolidating this morning: euro (1.1812), sterling (1.3521)and the Australian dollar (0.7522), but the yen (110.83) continues to weaken. The diverging government bond yields seem to be setting the tone, with safe-haven concerns taking a back seat.
The yuan is also consolidating (6.3677) and most of the emerging market currencies we follow are looking weaker again; the exception is the rand, which is managing to consolidate.
Today’s economic agenda includes data on Japan’s national core CPI, which climbed 0.7%, down from the previous reading of 0.9%, while data out later includes the German PPI and the WPI and the EU current account and trade balance. In addition, Federal Open Market Committee members Loretta Mester and Lael Brainard are speaking.
The base metals generally remain rangebound, volumes are lighter and the markets seem to be waiting for fresh direction from economic data that has in recent months pointed to less concerted global growth – some regional weakness has shown up, while in other areas growth has slowed. In these conditions, the metals are trading their own fundamentals more.
On balance, we think underlying sentiment is robust and that should provide support, but there seems little interest/need to chase prices higher – the summer lull seems to have arrived early.
Given considerable uncertainty over US trade and the geopolitical tensions this seems logical. With US treasury yields strengthening we need to be wary of corrections in broader markets that could lead to another risk-off moment, but in the absence of that we expect more rangebound trading. We would expect a more bullish scenario to unfold if economic data starts to pick-up again.
Silver and palladium prices seem to be holding up relatively well; platinum prices are back in low ground and gold prices are suffering because of rising US yields and dollar strength, which has increased the opportunity cost of holding gold. Emerging currencies can act as a barometer of risk appetite, given their weaker trends that may be a warning that we could see broader based risk-off.
With gold prices already weakening, gold may be seen as commodity that has already corrected and therefore is better placed to provide a safe haven again.
The post METALS MORNING VIEW 18/05: Nickel and aluminium prices have direction; rest are listless appeared first on The Bullion Desk.
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четверг, 17 мая 2018 г.
среда, 16 мая 2018 г.
METALS MORNING VIEW 16/05: Metals prices recover after Tuesday’s show of weakness
Most of the base metals prices on the London Metal Exchange were little changed on the morning of Wednesday May 16, the exceptions were zinc (+0.6%) and tin (-0.5%). Copper was up by 0.1% at $6,818 per tonne.
Volume on the LME has been below average, with 3,245 lots traded as at 06.27 am London time.
This follows a day of two halves on Tuesday where prices came under pressure as the morning progressed but ran into buying toward the end of the day.
Gold and silver prices were little changed this morning, with gold up 0.1% at $1,293.66 per oz, while the platinum group metals (PGM) are up by around 0.3%. This follows a day of weakness on Tuesday that saw the precious metals complex close down by an average of 1.7%, with gold prices breaking below support at $1,300 per oz to set a low at $1,288.70 per oz. The firmer dollar and stronger US treasury yields dominated over the heightened tensions in the Middle East.
The base metals prices on the Shanghai Futures Exchange were mixed with copper and lead prices down by 0.5% and 0.4% respectively, with the former at 51,010 yuan ($8,014) per tonne, while the rest of the complex was up between 0.1% for tin and 0.9% for zinc.
Spot copper prices in Changjiang were down by 0.5% at 50,630-50,790 yuan per tonne and the LME/Shanghai copper arbitrage ratio has firmed to 7.48, from 7.47 on Tuesday.
In other metals in China, iron ore prices were unchanged at 487 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were up by 0.3%, while gold and silver prices were down by 1.2%and 1.1% respectively.
In wider markets, spot Brent crude oil prices were up by 0.15% at $78.22 per barrel this morning, while the yield on US 10-year treasuries continues to climb and was recently quoted at 3.07%. Meanwhile, the German 10-year bund yield has firmed to 0.64%.
Equity markets in Asia were mixed on Wednesday: Nikkei (-0.34%), Hang Seng (+0.08%), CSI 300 (-0.09%), the ASX 200 (+0.33%) and the Kospi (+0.11%). Stronger US treasury yields and some weakness in Japanese data with first quarter preliminary gross domestic product (GDP) falling 0.2% from the prior quarter, seem to be weighing on sentiment. This follows a weaker performance in western markets on Tuesday, where in the US the Dow Jones closed down by 0.78% at 24,706.41, and in Europe where the Euro Stoxx 50 closed down by 0.04% at 3,564.29.
The dollar index, at 93.21, was consolidating Tuesday’s gains this morning – Tuesday’s high was 93.46 – the brief pullback between May 10 and May 14, appears to have just been a pause in the rally.
The other major currencies that had been weakening after the dollar strengthened were also consolidating this morning: euro (1.1838), sterling (1.3509), the Australian dollar (0.7482) and the yen (110.26). That said, they continue to look vulnerable. The yuan has also weakened, it was recently quoted at 6.3676 and most of the emerging market currencies we follow are looking weaker again, the exceptions being the rupee that is rebounding off recent lows.
The economic agenda is busy today, with data already out showing a mixed picture in Japan. GDP turned negative, GDP prices climbed 0.5%, while industrial production improved to 1.4%, from 1.2% previously. Data out later includes German and EU consumer price indices (CPI), UK leading indicators, with US data including building permits, housing starts, industrial production, capacity utilization, mortgage delinquencies and crude oil inventories.
The base metals generally remain rangebound, although trading seems to be more volatile and nervous. The underlying trends are that dips are bought into, suggesting underlying demand remains robust, but there is no urgency to chase prices higher. With US treasury yields strengthening we need to be wary of corrections in broader markets that could lead to another risk-off moment, but in the absence of that we expect more rangebound trading. We would expect a more bullish scenario to unfold if economic data starts to pick-up again.
Palladium prices are holding up relatively well, supported by tight supply fundamentals, but the other precious metals are suffering due to the opportunity cost of holding them increasing in line with rising US yields. Given heightened tensions over trade, sanctions, the Middle East and now with North Korea threatening to cancel the summit with the United States, geopolitical tensions could start to dominate again. We wait to see whether Tuesday’s break lower in gold prices was a false break or not.
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вторник, 15 мая 2018 г.
METALS MORNING VIEW 15/05: Nickel, lead in the driver’s seat; other metals rangebound
Base metals prices on the London Metal Exchange were on divergent paths on the morning of Tuesday May 15, with copper, nickel, lead and tin down by between 0.2% and 0.6%, while aluminium was unchanged and zinc prices had rebounded by 0.7%.
Volume on the LME has been average, with 4,526 lots traded as at 06.55 am London time.
Precious metals prices were broadly down with gold off by 0.1% at $1,311.91 per oz, silver prices down by 0.2%, palladium prices weaker by 0.3%, while platinum prices were up by 0.1%. A firmer dollar has acted as a headwind again, negating any bullishness due to increased tensions in the Middle East.
Copper and lead prices on the Shanghai Futures Exchange were weaker by 0.7% and 0.4% respectively this morning, with copper prices at 51,230 yuan ($8,080) per tonne, while the rest of the complex was stronger. Nickel prices led the gains with a 1.4% rebound, while aluminium, zinc and tin prices were up by between 0.1% and 0.3%.
Spot copper prices in Changjiang were down by 0.4% at 50,900-51,040 yuan per tonne and the LME/Shanghai copper arbitrage ratio has rebounded to 7.47 from 7.42 on Monday.
In other metals in China, iron ore prices were up by 0.1% at 484.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 0.4%, while gold and silver prices were down by 0.4%and 1% respectively.
In wider markets, spot Brent crude oil prices were down by 0.32% at $78.21 per barrel this morning after a strong performance on Monday. The yield on US 10-year treasuries has climbed back above 3% and was recently quoted at 3.02%, while the German 10-year bund yield has firmed to 0.62%.
Equity markets in Asia were weaker on Tuesday: Nikkei (-0.21%), Hang Seng (-1.05%), CSI 300 (-0.04%), the ASX 200 (-0.61%) and the Kospi (-0.71%). Stronger US treasury yields and some weakness in Chinese retail sales seem to be weighing on sentiment. This follows a flat to firmer performance in western markets on Monday, where in the US the Dow Jones closed up by 0.27% at 24,899.41, and in Europe where the Euro Stoxx 50 closed up by 0.01% at 3,565.74.
The dollar index was firmer this morning at 92.72 – this follows Monday’s rebound off a low of 92.24 – the brief pullback between May 10-14, appears to have been just a pause.
The rebound in the dollar has halted the rebounds in the other major currencies: euro (1.1928), sterling (1.3551), the Australian dollar (0.7515) and the yen (109.890). The yuan has also weakened, it was recently quoted at 6.3506 and most of the emerging market currencies we follow are looking weaker again.
The economic agenda is busy today, with data already out showing a mixed picture in China. The country’s fixed asset investment fell to 7%, having previously been up 7.5%, retail sales increased 9.4% after a 10.1% rise, but industrial production surprised to the upside with a 7% gain, after a previous reading of 6%. Japan’s tertiary industrial activity fell 0.3% and Germany’s first-quarter preliminary gross domestic product (GDP) climbed 0.3%, having been expected to climb 0.4% after a 0.6% rise in the fourth quarter.
European data out later includes the French consumer price index (CPI), data on UK employment, EU GDP, German and EU ZEW economic sentiment and EU industrial production. US data including retail sales, the Empire State Manufacturing Index, business inventories, housing market index and TIC long-term purchases is also due. In addition, US Federal Open Market Committee member John Williams is speaking.
The base metals generally remain rangebound with upside initiatives running into selling, while underlying sentiment remains strong enough to support price dips.
The two metals attempting a move on the upside are lead and nickel – lead probably because of the possibility of US sanctions against Iran which could impact lead exports. Meanwhile, nickel prices are upbeat as more nickel is now being consumed domestically in Indonesia, and therefore less is available for export, while the country ramps up stainless steel production.
On balance, across the base metals complex as a whole, we feel underlying demand is good, but with economic data not great, consumers feel in little need to chase prices higher.
The precious metals are oscillating sideways and most are in the lower half of their recent trading ranges, although palladium prices are holding up a bit higher than the rest of the complex. The stronger US treasury yields and firmer dollar seem to be keeping the cap on prices, even though there are heightened tensions over trade, sanctions and in the Middle East. We expect more sideways trading for now.
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понедельник, 14 мая 2018 г.
METALS MORNING VIEW 14/05: Metals start the week on firmer footing
Base metals prices on the London Metal Exchange were broadly positive on the morning of Monday May 14, with all of the metals, except for zinc (-0.1%), up by an average of 0.6%. Nickel and lead were the frontrunners with gains of 1.3% and 1.2% respectively.
Volume on the LME has been average, with 4,689 lots traded as at 06.42 am London time.
The precious metals were firmer across the board this morning, with the complex up by an average of 0.3% – gold prices were up by 0.1% at $1,319.87 per oz. Once again it looks as though gold prices have found support above $1,300 per oz and prices are attempting to work higher.
Lead and nickel prices on the Shanghai Futures Exchange also led the way this morning, with prices up by 2.4% and 2.2% respectively. Copper prices were up by 0.2% at 51,580 yuan ($8,140) per tonne, tin prices were up by 0.3%, while aluminium and zinc prices were down by 0.3% and 0.2% respectively.
Spot copper prices in Changjiang were up by 0.2% at 51,140-51,240 yuan per tonne and the LME/Shanghai copper arbitrage ratio has dropped to 7.42 from 7.51 for most of last week.
In other metals in China, iron ore prices were up by 1.6% at 485 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were up by 0.7%, while gold and silver prices were little changed.
In wider markets, spot Brent crude oil prices were down by 0.33% at $76.70 per barrel. The yield on US 10-year treasuries has eased back from the 3% level and was recently quoted at 2.96%, while the German 10-year bund yield has firmed to 0.56%.
Equity markets in Asia were for the most part up on Monday: Nikkei (+0.51%), Hang Seng (+1.12%), CSI 300 (+0.92%) and the ASX 200 (+0.27%), but the Kospi was struggling with a 0.04% decline. This follows a mixed performance in western markets on Friday, where in the US the Dow Jones closed up by 0.37% at 24,831.17, and in Europe where the Euro Stoxx 50 closed down by 0.12% at 3,565.52.
The dollar index is weaker this morning at 92.39 – this is the third down day after a strong rally that peaked at 93.42 on May 9. Having travelled 4.7% in an all but straight line since April 17 – some consolidation is not surprising. With the dollar edging lower, most of the other major currencies are getting some lift: euro (1.1970), sterling (1.3567), and the Australian dollar (0.7552), but the yen remains flat at 109.32. The yuan has strengthened, it was recently quoted at 6.3364 and most of the emerging market (EM) currencies have halted their slide – the exception being the Brazilian real and the ringgit, which has reversed an early spike lower.
The economic agenda is light today with Japan’s producer price index (PPI) rising 2%, which was down slightly from 2.1% previously, and the country’s machine tool orders were up 22%, after a previous reading of 28.1%. Later, US Federal Open Market Committee member Loretta Mester is speaking.
The base metals are quite diverse: In recent weeks it was aluminium that was leading the pack, now it is lead, nickel and copper, while aluminium and tin have been consolidating after recent weakness and zinc has been moving sideways. The easier dollar should provide some support for base metals’ prices, but the fact each metal is moving to its own tune, suggests underlying sentiment is neither bullish, nor bearish. We have said in recent weeks that if metals prices do not sell off given the raised geopolitical tensions, then it will be a sign that demand is not weak, but we still fell that in the current climate consumers may feel little need to chase prices higher.
Gold prices have once again found support above $1,300 per oz and prices are trading either side of $1,320 per oz. The pull-back in the dollar is no doubt helping support prices and the underlying geopolitical tensions are likely to providing support too. Silver has rebounded strongly, as have platinum and palladium. While prices may have found underlying support, there does not seem to be too much bullishness around. As such, we expect more rangebound trading.
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воскресенье, 13 мая 2018 г.
пятница, 11 мая 2018 г.
METALS MORNING VIEW 11/05: Metals prices consolidate ahead of LME Asia Week
Base metals price performance was a mix bag this morning, with a small average gain of 0.1% as of London time 06:42 am.
The London Metal Exchange three-month copper and aluminium price were down (-0.2%) and (-0.4%) respectively while the rest of its peers managed to eke out gains. At the time of writing, LME lead outperformed with a strong gain of (+0.7%) followed by tin with (+0.3%) while nickel and zinc were almost unchanged.
But with a total trading volume at 3,729 lots, below the weekly average of 5,540 lots, this suggests a very quiet market as metals prices consolidates ahead of the annual LME Asia Week gathering in Hong Kong.
Meanwhile, both zinc and tin prices in the Shanghai Futures Exchange (SHFE) bucked the trend this morning, with a decline of (-0.3%) and (-0.2%) respectively. That said, the SHFE complex was up 0.3% on average, with lead, copper and aluminium securing gains. Steel rebar prices on the SHFE were up 2% at 3,666 yuan per tonne while gold and silver prices were up 0.1% and 0.5% respectively.
In other metals, Iron ore prices rose 3.1% at 484 yuan per tonne on the Dalian Commodity Exchange.
President Trump’s decision to opt out of the Iran nuclear deal was overshadowed by military actions between Iran-Israel forces in Syria. The fresh geo-political tensions in the Middle-East and a slightly weaker dollar index due to softer US inflation number, have supported both gold and silver prices higher on Thursday May 10. Similarly, the platinum groups of metals (PGMs) prices were consolidating near recent high, with platinum trading at $923.20 per oz and palladium at $995.70 per oz respectively.
Furthermore, a supply concern in the oil market has kept the spot Brent crude oil prices near recent high at $77.29 per barrel.
The economic agenda is rather light today, with overnight data out of Japan’s M2 money stock at 3.3%, above market expectation of 3.2% and better than previous reading of 3.1% and a poor month-on-month reading on Australia home loans data. Market focus will turn to Canadian unemployment rate, US import prices as well as preliminary UoM consumer sentiment and inflation expectations. ECB president Draghi is set to speak in Florence later today, but it is unlikely to be a market-moving speech.
Despite a respite in the dollar index and the potential peace talk for the Korean peninsula, overall sentiment in the base metals complex remains nervous. Fresh geo-political concerns in the Middle-East, on-going trade negotiations between US and China as well as sluggish growth data from key economies continue to suppress consumers need to chase prices any higher. As global metals and mining professional convene in Hong Kong, Metal Bulletin coverage of the event may shed light into their views for the second half of 2018.
As we approach the end of the trading week, both gold and silver should remain attractive as market attention turn to Syria. Any fresh military development between the Iranian and Israel forces could easily pushed risk-averse investors into haven-buying mode. Also, previously build-up in bearish exposure from the speculative funds community is likely to come under short-covering pressure, which should support the rally in both metals.
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четверг, 10 мая 2018 г.
METALS MORNING VIEW 10/05: Metals prices largely weak, markets awaiting fresh direction
Base metals prices on the London Metal Exchange were more negative than positive on the morning of Thursday May 10, with all of the metals, except for tin (+0.2%) and lead (0.0%), down by an average 0.6%.
Aluminium prices led the decline with a 1.1% drop to $2,330 per tonne, while copper prices were down by 0.1% at $6,811 per tonne.
Volume on the LME has been below average, with 4,769 lots traded as at 07.09 am London time.
This follows on from a day of consolidating-to-firmer prices on Wednesday, when copper, aluminium and lead were little changed, while nickel, zinc and tin prices closed up between 0.3% and 0.5%.
The precious metals were firmer across the board with the complex up by an average of 0.3% – gold is the laggard with prices up just $0.55 per oz at $1,312.90 per oz.
This follows a mixed performance on Wednesday, where gold prices dropped by 0.2%, silver and platinum prices were little changed and palladium prices closed up by 0.5%. Considering the United States announced it was walking away from the Iran nuclear deal, we are surprised gold did not react more positively.
Copper prices on the Shanghai Futures Exchange this morning were up by 0.6% at 51,210 yuan ($8,039) per tonne, nickel prices were off by 0.2%, while the rest of the metals were little changed.
Spot copper prices in Changjiang were up by 0.3% at 50,840-51,000 yuan per tonne and the LME/Shanghai copper arbitrage ratio has edged up to 7.52 from 7.51 on Wednesday.
In other metals in China, iron ore prices were down by 0.8% at 468 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 0.1%, while gold and silver prices were up by 0.1% and 0.4% respectively.
In wider markets, spot Brent crude oil prices were up by 0.49% at $77.72 per barrel, underpinned by the US/Iran developments. Meanwhile, the yield on US 10-year treasuries eased back from the 3% level and was recently quoted at 2.98%, and the German 10-year bund yield eased to 0.55%.
Equity markets in Asia were largely up on Thursday: Nikkei (+0.39%), Hang Seng (+0.64%), CSI 300 (-0.01%), Kospi (+0.61%) and the ASX 200 (+0.17%). This follows a stronger performance in western markets on Wednesday, where in the US the Dow Jones closed up by 0.75% at 24,542.54, and in Europe where the Euro Stoxx 50 closed up by 0.33% at 3,569.74.
The dollar index is consolidating recent gains again, at 92.97, it is just hovering below Wednesday’s high of 93.42 – the uptrend looks strong, but it has already travelled 4.7% in an all but straight line since April 17 – so some consolidation may be needed. With the dollar rally pausing, most of the other major currencies have halted their slides: euro (1.1874), sterling (1.3567), and the Australian dollar (0.7469) are steady, but the yen remains on a back footing at 109.84. The yuan is also consolidating at 6.3639, but most of the emerging market (EM) currencies we follow remain on a back footing, although the rand and peso have managed to firm.
The economic agenda is very busy today – see table below. Of the data out so far, China’s consumer price index (CPI) has slipped to 1.8% from 2.1%, but its producer price index (PPI) has climbed to 3.4% from 3.1%.
There is a host of European data out later which includes a European Central Bank (ECB) economic bulletin, Italian industrial production and a raft of UK data including industrial and manufacturing production, goods trade balance, construction output, the Bank of England’s inflation report and monetary policy data and interest rate decision. There is also CPI, initial jobless claims, natural gas storage and the federal budget balance from the US of note.
The recent rebounds in aluminium, zinc and lead are consolidating, while copper, nickel and tin prices remain rangebound. The combination of less than bullish economic data, the strong dollar, rising yields, high oil prices and heightened geopolitical tensions all make for a risk-off environment. As such, we would not be surprised if prices came under more downward pressure. If that is avoided, however, then it will be a sign that demand is not weak, but it will reconfirm our belief that in the current climate consumers feel little need to chase prices higher.
The fact gold prices have failed to react bullishly to the increased geopolitical risk over Iran/US suggests there is a lack of interest in switching to risk-on trade. The opportunity cost of holding gold is also higher now that US treasury yields are firmer and the stronger dollar is a headwind too. If higher yields, a stronger dollar and geopolitical tensions start to undermine investor confidence in broader markets, then gold may start to pick up safe-haven buying.
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среда, 9 мая 2018 г.
METALS MORNING VIEW 09/05: Metals nervous due to stronger dollar; rising yields start to rattle EM currencies
Base metals prices on the London Metal Exchange were mixed on the morning of Wednesday May 9, with all the metals, except tin (+0.2%) and lead (+0.3%), down by an average of 0.3%. Copper prices were off 0.4% at $6,785 per tonne.
Volume on the LME has been below average, with 5,734 lots traded as at 07.37 am London time.
This follows on from what turned out to be a generally negative day on Tuesday, when despite most of the metals opening with gains, the complex closed down by an average of 0.3%.
The precious metals were split with losses in gold and silver of 0.5% and 0.4% respectively, with gold at $1,308.82, while platinum prices were little changed and palladium prices were up by 0.2%. Considering the United States is walking away from the Iran nuclear deal, we are surprised gold is not stronger.
Base metals prices on the Shanghai Futures Exchange this morning were for the most part weaker, with the complex down by an average of 0.5%. Lead prices were up by 0.2%, while the rest of the metals were down, with copper prices off by 0.8% at 50,990 yuan ($8,005) per tonne.
Spot copper prices in Changjiang were down by 0.6% at 50,680-50,810 yuan per tonne and the LME/Shanghai copper arbitrage ratio has climbed to 7.51 from 7.49 on Tuesday.
In other metals in China, iron ore prices were down by 0.5% at 470.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 1.8%, while gold and silver prices were both down by 0.1%.
In wider markets, spot Brent crude oil prices were up by 0.9% at $76.63 per barrel, it would appear the US/Iran development was generally expected. Meanwhile, the yield on US 10-year treasuries was strong at 2.99%, as was the German 10-year bund yield at 0.57%.
Equity markets in Asia were mixed on Wednesday: Nikkei (-0.44%), Hang Seng (+0.15%), CSI 300 (-0.36%), Kospi (-0.24%) and the ASX 200 (+0.26%). This follows a flat to weaker performance in western markets on Tuesday, where in the US the Dow Jones closed little changed at 24,360.21, and in Europe where the Euro Stoxx 50 closed down by 0.18% at 3,557.88.
The dollar index is rallying again, at 93.38 it has extended its gains and has reconfirmed its bull run. Conversely, the other major currencies are weaker: euro (1.1829), sterling (1.3508), the yen (109.63) and the Australian dollar (0.7419). The yuan is also weaker at 6.3747, as are all the emerging market (EM) currencies we follow. The weakness in the EM currencies is a sign that traders are getting nervous about the rising dollar and higher US treasury yields. In this environment it is not surprising that traders are reducing risk exposure.
Economic data out already on Wednesday showed weak UK retail sales and mixed data out of Japan, where average cash earnings climbed 2.1%, having previously climbed 1%, but leading indicators came in at 105%, after a previous reading of 106%. Data out later includes French industrial production, Italian retail sales, with US data including producer price index (PPI), wholesale inventories and crude oil inventories.
The base metals’ recent attempts to rally ran into supply and prices are consolidating once again. The combination of less than bullish economic data, the strong dollar, rising yields, high oil prices and heightened geopolitical tensions, all make for a risk-off climate. As such, we would not be surprised if prices came under more downward pressure. If that is avoided, however, then it will be a sign that demand is not weak, but it will reconfirm our belief that in the current climate consumers feel little need to chase prices higher.
The fact gold prices are down at a time when geopolitical risks have increased, suggests risk-off is affecting all the metals for now. The opportunity cost of holding gold is also higher now that US treasury yields are firmer and the stronger dollar is a headwind too. If higher yields, a stronger dollar and geopolitical tensions start to undermine investor confidence in broader markets, then gold may start to pick up safe-haven buying.
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вторник, 8 мая 2018 г.
METALS MORNING VIEW 08/05: Metals prices buoyed by strong Chinese trade data
Base metals prices on the London Metal Exchange were for the most part stronger on the morning of Tuesday May 8, with all the metals, except tin (-0.7%), up by an average of 0.7%. Zinc led the advance with a 1% gain and copper was up by 0.2% at $6,858 per tonne.
Volume on the LME has been average, with 7,927 lots traded as at 07.06 am London time.
The precious metals were more diverse this morning with gold and silver bullion prices off by 0.2%, while platinum and palladium prices were up 0.3% and 0.4% respectively.
Base metals prices on the Shanghai Futures Exchange this morning were for the most part stronger, with the complex up by an average of 0.6%. As on the LME, tin prices were down by 0.7%, while the rest of the metals were up by an average of 0.9%, with copper prices up by 0.3% at 51,420 yuan ($8,079) per tonne.
Spot copper prices in Changjiang were up by 0.3% at 50,960-51,100 yuan per tonne and the LME/Shanghai copper arbitrage ratio was recently at 7.49.
In other metals in China, iron ore prices were up by 1.6% at 476 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were down by 0.1%, while gold and silver prices were both down by 0.1%.
In wider markets, spot Brent crude oil prices were strong at $75.67 per barrel, the yield on US 10-year treasuries was easier at 2.95%, as was the German 10-year bund yield at 0.53%.
Equity markets in Asia were for the most part stronger on Tuesday: Nikkei (+0.18%), Hang Seng (+1.41%), CSI 300 (+1.26%) and the ASX 200 (+0.12%), but the Kospi is down by 0.47%. This follows a stronger performance in western markets on Monday, where in the United States the Dow Jones closed up by 0.39% at 24,357.32, and in Europe where the Euro Stoxx 50 closed up by 0.38% at 3,564.19.
The dollar index at 92.69 remains firm and seems to be trending higher now. The recent high was 92.98, so in the short term the index is consolidating. The other major currencies we follow are mixed with the euro looking weaker at 1.1928, sterling is firmer at 1.3582 after having found support in recent days, as has the yen (108.91), while the Australian dollar (0.7516) is consolidating.
Economic data out already on Tuesday showed strength in China’s April imports (+21.5% year on year) and exports (+12.9% year on year) in dollar terms, which suggests a strong domestic economy and a pickup in the activity with China’s trading partners. In addition, Germany’s industrial production climbed 1%, having been expected to climb 0.8%, and the country’s trade balance was also stronger. Later there is data on UK house prices, with US data on small businesses, job openings and economic optimism. In addition, US Federal Reserve chair Jerome Powell is speaking, while at 7pm London time US President Donald Trump is scheduled to talk about about the Iranian nuclear deal.
Aluminium prices have been setting the stronger tone across most of the base metals in recent days, with copper, zinc, lead and nickel prices following suit, while tin prices continue to meander sideways. We have remained quietly bullish, but have seen the lack of encouraging economic news as the main reason that has capped the upside. Today’s stronger Chinese trade data shows some pickup in activity, if this feeds through to a pickup in economic data in the weeks ahead then confidence may rebound and with it some restocking.
Precious metals prices had been under pressure ahead of last week’s US Federal Open Market Committee meeting, but with that now out of the way prices have found some lift. The firm dollar continues to be a headwind, so in the absence of a pickup in geopolitical tension we expect gold prices to remain in their sideways trading pattern. Trump’s action on the Iranian deal may well set the next direction for gold prices.
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понедельник, 7 мая 2018 г.
воскресенье, 6 мая 2018 г.
пятница, 4 мая 2018 г.
четверг, 3 мая 2018 г.
METALS MORNING VIEW 03/05: Metals prices consolidate after dollar rally pauses
Base metals prices on the London Metal Exchange were for the most part little changed on the morning of Thursday May 3, with copper prices up just 0.1% at $6,825 per tonne. The exceptions were zinc prices, which were down by 1% at $3,080 per tonne, and lead prices that were up by 0.5% at $2,290 per tonne.
Volume on the LME has been average, with 6,196 lots traded as at 07.02 am London time.
This follows a diverse day of trading on Tuesday that saw a 3.4% gain in aluminium prices, 1.3% and 0.8% increases in nickel and copper prices respectively, while zinc, lead and tin prices were down by an average of 0.7%.
The precious metals were all in positive territory this morning with gains averaging 0.4%, with palladium prices up by 1% at $968 per oz, while gold prices were up by 0.2% at $1,308.52 per oz. This after a stronger performance on Wednesday, when the complex closed up by an average of 0.8%. So once again it does look like prices weakened ahead of the US Federal Open Market Committee (FOMC) meeting, but have since rebounded.
On the Shanghai Futures Exchange this morning, metals prices were for the most part little changed, the exceptions were aluminium, where prices are up by 0.7%, and zinc, where prices were off by 0.4%. Copper prices were off by 0.1% at 50,960 yuan ($8,006) per tonne.
Spot copper prices in Changjiang were little changed at 50,680-50,830 yuan per tonne and the LME/Shanghai copper arbitrage ratio has weakened to 7.44, from 7.49 on Wednesday morning.
In other metals in China, iron ore prices were up by 1.1% at 473.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were up by 0.3%, while gold and silver prices were up by 0.2% and 0.5% respectively. Again we note that the basic raw material prices remain firm, which may suggest a pick-up in restocking now we are further into the seasonally strong second quarter.
In wider markets, spot Brent crude oil prices were firmer, up by 0.21% at $73.20 per barrel, the yield on US 10-year treasuries was a shade easier at 2.97%, and the German 10-year bund yield was firmer at 0.58%.
Equity markets in Asia were mixed with the Hang Seng (-1.04%), the Kospi (-0.73%) weaker, while the CSI 300 (+0.8) and the ASX 200 (+0.8) stronger. This follows a split performance in western markets on Wednesday, where in the United States the Dow Jones closed down by 0.72% at 23,924.98, and in Europe where the Euro Stoxx 50 closed up 0.50% at 3,553.79.
The dollar index at 92.48 – after a high of 92.84 on Wednesday – suggests the latest run up in the dollar may have run its course, at least for now. This has provided some support in the other currencies with the euro at 1.1989, the yen at 109.61, the Australian dollar 0.7522 and sterling at 1.3605. The yuan, however, remains on a back footing at 6.3620, while the other emerging currencies we follow are mixed with weakness showing in the rupiah, real and ringgit, while the weakness in the peso, rand and rupee has halted.
The economic agenda is busy today with data on Spanish unemployment, UK services purchasing managers’ index (PMI), EU consumer price index (CPI) and producer price index (PPI), with US data that includes Challenger job cuts, initial jobless claims, nonfarm productivity, unit labor costs, trade balance, factory orders, services PMI and natural gas storage.
The base metals have been looking weak, but some dip-buying has emerged today, with the likes of nickel, aluminium and copper seeing buying over the past few days. If the dollar’s rally has run its course for now then that may take some downward pressure off prices. Whether we see consumers restocking remains to be seen – given the subdued economic data, they may not feel in any hurry to do so. That said, the economic data may not be exciting, but it is still showing expansion, as seen by the JP Morgan global composite PMI that has edged up to 53.5 from 53.3.
Precious metals prices have been under pressure with gold, silver and platinum prices recently breaching support levels. With the dollar’s rise halting for now, prices have found some support, but the markets continue to look vulnerable. We expect the dollar to set the direction for now.
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среда, 2 мая 2018 г.
METALS MORNING VIEW 02/05: Metals prices rebound on recovery in volume after China returns
Base metals prices on the London Metal Exchange were for the most part firmer on the morning of Wednesday May 2, with five of the six base metals showing gains averaging 0.6%, while tin bucked the trend with a 0.1% decline. Copper led on the upside with a 1% gain to $6,816 per tonne.
Volume on the LME has rebounded with the return of Chinese participants following public holidays in China on Monday and Tuesday. There were 9,862 lots traded as at 06.27 am London time, this after an average volume of 1,710 lots at a similar time on Monday and Tuesday.
This follows a general day of weakness on Tuesday, when the complex closed down by an average of 0.4%, led by a 1.6% drop in zinc prices. Nickel (+0.8%) was the only metal to show gains on Tuesday.
The precious metals were all in positive territory this morning with gains averaging 0.6%, with gold prices up by 0.3% at $1,308.97 per oz. This after a weak performance on Tuesday when the complex was down by an average of 1.3%. We do wonder how much of the weakness in gold has been the market positioning itself ahead of this afternoon’s US Federal Open Market Committee (FOMC) rate decision and statement.
On the Shanghai Futures Exchange this morning, metals prices were for the most part weaker as they play catch-up having been closed for two days. Lead prices were the only ones in positive territory, with prices up by 1.1%, the rest were weaker with copper prices down by 1.1% at 51,030 yuan ($8,048) per tonne, while the rest saw losses of between 0.3% and 0.5%.
Spot copper prices in Changjiang were down by 1.7% at 50,710-50,850 yuan per tonne – the fact that futures were not off as much as the spot shows buying has come into the market since the spot price was set. The LME/Shanghai copper arbitrage ratio has firmed to 7.49 from 7.44 before the holidays.
In other metals in China, iron ore prices were up by 1.1% at 468.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices were up by 2.8%, while gold and silver prices were off by 0.2% and 0.7% respectively. We take some comfort from the fact basic raw material prices have opened up positively after the May 1 holiday.
In wider markets, spot Brent crude oil prices were weaker, with prices down by 0.21% at $73.18 per barrel, the yield on US 10-year treasuries was slightly firmer at 2.98%, and the German 10-year bund yield was little changed at 0.56%.
The equity markets in Asia are for the most part weaker: Nikkei (-0.22%), Hang Seng (-0.67%), CSI 300 (-0.04%), Kospi (-0.46%), while the ASX 200 is bucking the trend with a 0.59% gain. This follows a weaker performance in western markets on Tuesday, where in the United States the Dow Jones closed down by 0.27% at 24,099.05, and in Europe where the Euro Stoxx 50 closed little changed, off by 0.01% at 3,536.26 – not forgetting that most European equity markets were closed on Tuesday.
The dollar index at 92.44 continues to climb with the index clearly having broken out of a base formation that it has been in for most of the year – up until it broke higher on April 23. Dollar strength has weighed on other currencies: euro (1.1966), yen (109.79), sterling (1.3595) and the Australian dollar (0.7502). The yuan was weaker too at 6.3609, which is testing former support at 6.3625 from February 22. The emerging market currencies we follow were also on a back footing, suggesting some unrest over the stronger dollar and firmer US bond yields, which could increase the cost of servicing debt.
The economic agenda is busy today with data already out showing China’s Caixin manufacturing PMI edge higher to 51.1 from 51 – it was expected to come in at 50.9. Japan’s consumer confidence dipped to 43.6 from 44.3.
Later there is manufacturing PMI data out across Europe, as well as data on Italian and EU unemployment, UK construction, EU and Italian gross domestic product (GDP), with US data including ADP non-farm employment change, crude oil inventories and then this evening’s FOMC rate decision and statement. In addition, Germany’s Bundesbank President Jens Weidmann is speaking.
The base metals have been looking weak and the path of least resistance has been to the downside and that might have been accelerated on Tuesday given the thin trading conditions with China and most of Europe on holiday. Overall, we see the current weakness as being part of the drawn-out adjustment to the bullishness seen in 2016 and 2017, and with economic data now pointing to weaker growth, the markets have lost upward momentum. In turn, lack of upward momentum is leading to stale long liquidation. As such, we do not expect too much until we see better economic data and with that in mind we eagerly wait Europe’s PMI data this morning and the US employment report on Friday.
Precious metals prices are attempting to rebound this morning after a weak performance on Tuesday and overnight that saw gold, silver and platinum prices breach recent support levels. The strong dollar and firmer US treasury yields are a negative for precious metals, as is the general lackluster market condition. There has also been a trend of seeing weakness ahead of FOMC meetings, so we wait to see if gold prices pick up if the FOMC statement does not sound hawkish.
The post METALS MORNING VIEW 02/05: Metals prices rebound on recovery in volume after China returns appeared first on The Bullion Desk.
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вторник, 1 мая 2018 г.
METALS MORNING VIEW 01/05: Metals prices drift in absence of bullish news
Base metals prices on the London Metal Exchange were mixed in the morning of Tuesday May 1, with copper (-0.7% at $6,775 per tonne), aluminium (-0.2%) and zinc (-0.4%) prices lower, while tin prices are untraded and lead and nickel prices are both up 0.3%.
Chinese markets are closed for a national holiday today, meaning volume has been light with 1,225 lots traded as of 6.24am London time.
This follows a diverse performance on Monday, that saw aluminium and tin prices rise 1.1% and 0.9% respectively, copper prices little changed, while nickel, lead and zinc prices fell 1.4%, 1.4% and 0.6% respectively.
Precious metals prices are down across the board this morning by an average of 0.3%, which has gold at $1,311.43 per oz. This follows weak performance on Monday when prices fell between 0.5-1% across the complex. The lackluster performance in the industrial metals, combined with a firm dollar, are weighing on the precious metals prices.
In wider markets, spot Brent crude oil prices were firmer, with prices up by 0.22% at $74.78 per barrel, the yield on US 10-year treasuries was little changed at 2.96%, and the German 10-year bund yield was easier at 0.56%.
The equity markets in Asia that are open are firmer with the Nikkei up 0.15% and the ASX 200 up by 0.58%. This follows a mixed performance in western markets on Monday, where in the United States the Dow Jones closed down by 0.61% at 24,163.15, and in Europe where the Euro Stoxx 50 closed up by 0.50% at 3,536.52. Most of Europe will be closed today for May Day holidays.
The dollar index remained firm at 91.90, the recent high being 91.99, and it looks as though the dollar is now heading higher having spent most of the year, up until recently, in a sideways base formation. This is likely to prove another headwind for metals prices. Conversely, the other major currencies we follow are on a back footing: euro (1.2067), sterling (1.3752), yen (109.39) and the Australian dollar (0.7539).
The economic agenda is busy today: data already out shows a rebound in Japan’s manufacturing PMI to 53.8 from 53.3; later there is PMI data out in the United Kingdom and the US. Other data being released today includes data on UK money supply and lending, with US data including construction spending, ISM manufacturing prices and total vehicle sales.
The base metals are on a back footing, with copper, zinc and nickel showing weakness, while the rest are just managing to tread water, although they also look vulnerable. We see the weakness as being part of the drawn-out adjustment to the bullishness seen in 2016 and 2017, and with economic data now pointing to weaker growth the markets have lost upward momentum. In turn, lack of upward momentum is leading to stale long liquidation. As such, we do not expect too much until we see better economic data – Japan’s PMI was a step in the right direction and we wait to see what today’s and tomorrow’s PMI data shows. On copper, last Friday’s CFTC data showed short-covering and a low gross short position, while the long position picked up for the second week running, this after a long drawn-out stretch of long liquidation. We wait to see if these are early signs that the funds are getting more interested again.
Precious metals prices are under pressure and support levels in gold around $1,302-1,307 per oz may now be retested. Platinum prices have broken recent support levels, while silver is holding up and palladium prices are retreating, but are still mid-range. It may be that gold prices are doing their usual pre-Federal Open Market Committee (FOMC) meeting sell-off ahead of Wednesday’s FOMC decision and statement.
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