August 18, 2014
The base metals put in a bit of a rebound on Friday with gains averaging 0.5 percent after what had generally been a week when prices had been under pressure on the back of weaker Chinese data and higher geopolitical tensions.
This morning the base metals are little changed, with the copper and aluminium price up 0.1 percent at $6,882.50 and $2,005, while lead is off 0.2 percent at $2,215.75 and the rest are little changed. Volume has been very light with 1,170 lots traded as of 06:00 BST.
Data out this morning showed Chinese foreign direct investment declined 0.4 percent, after a 2.2 percent gain previously, which will add to the concerns about another slowdown in China. Rightmove’s UK house prices index also showed a decline of 2.9 percent.
In Shanghai, the October base metals are 0.5 percent firmer on average as the metals followed on from the rebound in LME prices on Friday with the copper price up 0.8 percent at Rmb 49,230, the aluminium price is up 0.6 percent at Rmb 14,050, zinc is off 0.3 percent at Rmb 16,480 and lead is off 0.2 percent at Rmb 14,450.
The spot copper price in Changjiang is up 0.4 percent at Rmb 49,450-49,650, the backwardation with the futures is at an equivalent of around $70/tonne, while the LME/Shanghai copper arb window remains closed with the ratio around 7.15 for October.
Equities – concerns over Ukraine led to a pull back on Friday with the Euro Stoxx 50 off 0.8 percent and the Dow off 0.3 percent, but Asia has been mixed with the Nikkei up 0.1 percent, the Hang Seng is off 0.3 percent, the Kospi is down 0.2 percent and the CSI 300 is up 0.4 percent.
Currencies –the dollar index is holding up in high ground last at 81.41, the euro is edging higher last at 1.3394. Sterling has turned higher, last at 1.6730, after a low of 1.6653, the aussie is strengthening, last at 0.9324, the yen is flat at 102.30, while the yuan continues to strengthen last at 6.1470.
The economic agenda for the rest of the day is fairly light with the EU trade balance, the German Bundesbank monthly report and US NAHB house market index – see table below.
The base metals seem to be under pressure to varying degrees with copper leading the decline, while the others are heading sideways-to-lower. With disappointing data out of China last week and concerns about the strength of Europe’s recovery, it is not too surprising that metal prices are soft, especially as we are in the summer slowdown. We expect more of the same, with the metals that have seen strong gains in recent months, namely aluminium, zinc and lead, all vulnerable to stale long liquidation.
Data out this morning showed Chinese foreign direct investment declined 0.4 percent, after a 2.2 percent gain previously, which will add to the concerns about another slowdown in China. Rightmove’s UK house prices index also showed a decline of 2.9 percent.
In Shanghai, the October base metals are 0.5 percent firmer on average as the metals followed on from the rebound in LME prices on Friday with the copper price up 0.8 percent at Rmb 49,230, the aluminium price is up 0.6 percent at Rmb 14,050, zinc is off 0.3 percent at Rmb 16,480 and lead is off 0.2 percent at Rmb 14,450.
The spot copper price in Changjiang is up 0.4 percent at Rmb 49,450-49,650, the backwardation with the futures is at an equivalent of around $70/tonne, while the LME/Shanghai copper arb window remains closed with the ratio around 7.15 for October.
Equities – concerns over Ukraine led to a pull back on Friday with the Euro Stoxx 50 off 0.8 percent and the Dow off 0.3 percent, but Asia has been mixed with the Nikkei up 0.1 percent, the Hang Seng is off 0.3 percent, the Kospi is down 0.2 percent and the CSI 300 is up 0.4 percent.
Currencies –the dollar index is holding up in high ground last at 81.41, the euro is edging higher last at 1.3394. Sterling has turned higher, last at 1.6730, after a low of 1.6653, the aussie is strengthening, last at 0.9324, the yen is flat at 102.30, while the yuan continues to strengthen last at 6.1470.
The economic agenda for the rest of the day is fairly light with the EU trade balance, the German Bundesbank monthly report and US NAHB house market index – see table below.
The base metals seem to be under pressure to varying degrees with copper leading the decline, while the others are heading sideways-to-lower. With disappointing data out of China last week and concerns about the strength of Europe’s recovery, it is not too surprising that metal prices are soft, especially as we are in the summer slowdown. We expect more of the same, with the metals that have seen strong gains in recent months, namely aluminium, zinc and lead, all vulnerable to stale long liquidation.
| BST | 06:01 | +/- | +/- % | Lots |
| Cu | 6882.25 | 9.5 | 0.1% | 863 |
| Al | 2005 | 1.25 | 0.1% | 118 |
| Ni | 18667 | 4 | 0.0% | 1 |
| Zn | 2282.75 | 1 | 0.0% | 148 |
| Pb | 2215.75 | -4.25 | -0.2% | 49 |
| Sn | 22450 | 0 | 0.0% | 0 |
| Steel | 450 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.0% | 1,179 | ||
| Gold | 1302.2 | -2.2 | -0.2% | |
| Silver | 19.59 | 0.06 | 0.3% | |
| Platinum | 1450.4 | -1.6 | -0.1% | |
| Palladium | 890.4 | 0.4 | 0.0% | |
| Average PM | 0.0% | |||
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:01am | UK | Rightmove HPI m/m | -2.9% | -0.8% | |
| 3:00am | China | Foreign Direct Investment ytd/y | -0.4% | 2.2% | |
| 10:00am | EU | Trade Balance | 14.9B | 15.3B | |
| 11:00am | Germany | German Buba Monthly Report | |||
| 3:00pm | US | NAHB Housing Market Index | 53 | 53 |
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