Volume has been average with 7,431 lots traded as of 07.16am London time.

Precious metals prices are little changed to slightly firmer with the complex up by an average of 0.1%, with spot gold prices at $1,321.23 per oz.

On the Shanghai Futures Exchange, metals prices are mirroring the performance of those on the LME. Lead, zinc and tin prices are off by an average of 1.2%, led by a 2.2% fall in zinc prices, while copper, aluminium and nickel prices are up by an average of 0.6% with copper prices at 52,660 yuan ($8,303) per tonne. Spot copper prices in Changjiang are up by 0.1% at 51,780-51,900 yuan per tonne and the LME/Shanghai copper arbitrage ratio has edged up to 7.58 from 7.53 on Monday.

In other metals in China, iron ore prices are down by 1.7% at 520.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices are down by 0.1%, while gold prices are little changed and silver prices are down by 0.2%.

In wider markets, spot Brent crude oil prices are up by 0.09% at $65.62 per barrel, while the yield on US 10-year treasuries has rebounded to 2.88%, as has the German 10-year bund yield that was recently quoted at 0.65%.

Equity markets in Asia are stronger this morning, suggesting investors are putting the potential for trade wars behind them, at least until more news emerges: Nikkei (+1.76%), Hang Seng (+2.24%), CSI 300 (+1.21%), ASX 200 (+1.14%) and the Kospi (-1.13%). This follows rebounds in western markets on Monday, where in the United States the Dow Jones closed up by 1.37% at 24,874.76, and in Europe where the Euro Stoxx 50 closed up by 0.92% at 3,355.32.

The dollar index continues to consolidate, it was recently quoted at 90.00, this after peaking on Thursday at 90.94. The pullback in the dollar has underpinned a firmer euro (1.2342), while sterling is consolidating (1.3833), as are the Australian dollar (0.7764) and yen (106.12). The yuan is flat at 6.3427, while the other emerging market currencies we follow are mixed.

Economic data out today includes UK’s BRC retail sales monitor which climbed 0.6%, unchanged from the previous reading. Later there is data on EU retail purchasing managers’ index, US factory orders and IBD/TIPP economic optimism. In addition, US Federal Open Market Committee members William Dudley, Lael Brainard and UK Monetary Policy Committee member Andrew Haldane are speaking.

The rise in zinc stocks on the LME sent jitters through the zinc market and prices corrected accordingly. It is surprising so much stock had been held off market for so long given the price gains in recent quarters - the market will now remain nervous to see how much more is out there and whether it is released back to the market.

That said, LME zinc stocks were getting very low, so the stock inflow will provide more liquidity in the LME system. We do not think the stock inflow changes the current fundamental outlook, which we expect to remain tight – a condition we see across all the base metals. Proof, however, will be in how well the metals prices are supported. With most of the metals recently capped it does look as though consumers have not felt the need to chase prices higher, but we do expect them to be keen bargain hunters.

Gold prices are holding up well, but the more industrial precious metals are suffering in line with the weaker tone in the base metals, where sentiment has become less bullish in recent weeks on the back of the more hawkish US Federal Reserve speak and weaker tone in broader markets. Concern about broader markets may well underpin gold prices.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.