Not, all the data released so far has been bad though; the all-important Chinese trade data for April showed a surprise 3.5% rise in exports compared with a year ago, when the market had expected a 15% fall - although the country’s imports did fall 14.2%.

  • Asian-Pacific equity indices were mainly weaker this morning.
  • Metals on the Shanghai Futures Exchange are looking stronger than on the LME this morning, highlighting regional economic disparities.
  • On Wednesday, the European Commission forecast that the eurozone economy would contract by a record 7.7% this year.
Base metals
Three-month base metals prices on the LME were little changed this morning, with most in the range of plus or minus 0.1% - the exception being lead, which was up by 0.4% at $1,643 per tonne. Copper was up 0.1% at $5,223.50 per tonne. 

Volumes have been below average with 4,345 lots traded as of 6.03am London time. This compares with an average of 7,443 lots at a similar time across last week.

Precious metals
Spot gold prices were little changed at $1,691.03 per oz this morning - up by 0.2% from Wednesday’s close, but down from $1,702.07 at a similar time on Wednesday morning. 

Overall, precious metals are stuck in consolidation mode, trading sideways-to-lower. While they are starting to look vulnerable on the charts, all the uncertainty in the markets should provide support.

Wider markets
The yield on benchmark US 10-year treasuries has edged higher again; it was recently quoted at 0.71% this morning, compared with 0.66%, 0.63% and 0.61% at a similar time on Wednesday, Tuesday and Monday respectively.

Asian-Pacific equities were mixed this morning: the Kospi (+0.14%), Nikkei (+0.01%), the Hang Seng (-0.75%), China’s CSI 300 (-0.24%) and the ASX 200 (-0.59%).

The US dollar index is consolidating recent gains, it was recently quoted at 100.07, which compares with 99.85 at a similar time on Wednesday and follows a low of 98.54 on May 1.

The other major currencies we follow were mixed this morning: the euro (1.0801) is weaker, as is sterling (1.2362), while the Australian dollar (0.6442) and the yen (106.29) were firmer.

Key data
There is a mass of economic data out on Thursday, although too much to mention in full (see table below). Chinese trade data, was considerably better than expected, but the Caixin services purchasing managers index (PMI) at 44.4 was worse than the 50.1 that had been anticipated and German industrial production fell 9.2%, compared with the 7.3% fall expected. 

Other key data includes French industrial production, Italian retail sales and US employment data.

In addition, Bank of England governor Andrew Bailey, Germany’s Bundesbank president Jens Weidmann, European Central Bank president Christine Legarde and Federal Open Market Committee member Patrick Harker are all speaking today.

Today’s key themes and views
Base metals are, for the most part, drifting higher within their relatively high holding patterns. The exception is zinc ($1,985 per tonne), which has punched higher to set a fresh recovery high, overcoming the April high of $1,969.50.

The combination of Chinese stockpiling and the prospect for an increase in demand once the US and Europe follow in China’s footsteps - albeit a slow recovery - may well underpin a gradual pick-up in prices. Indeed, today’s Chinese trade data supports this view.

Gold prices pulled back again on Wednesday - which was surprising given the dreadful US employment numbers - but the overall view remains unchanged: with so much uncertainty around, we expect any dips in gold to be well supported and if investors are concerned about the sustainability of equity rebounds then more money may find its way into gold.