• Concerns over China’s policy on credit tightening in focus ahead of Friday’s gross domestic product (GDP) data
  • Aluminium sets fresh highs for the year

Base metals
LME three-month base metals prices were mixed this morning with copper up by 0.3% at $9,108 per tonne, zinc down by 0.4% at $2,819.50 per tonne and nickel down by 1.6% at $16,100 per tonne, while the rest were little changed. Aluminium, although only up by 0.2% at $2,332 per tonne this morning, is the only metal pushing the envelope on the upside.

The most-active base metals contracts on the SHFE were mainly upbeat this morning, the exception was June nickel that was down by 0.7%, while the rest were up by an average of 1%, led by a 1.8% rise in June copper that was recently up 1.8% at 67,470 yuan ($10,322) per tonne. While LME copper stocks might be rising, the main copper story seems to be the concentrate shortage.

Precious metals
Spot gold prices were up by 0.4% at $1,743.14 per oz this morning, while the rest of the precious metals were up by an average of 0.5%.

Wider markets
The yield on US 10-year treasuries has edged higher to 1.63% this morning, from 1.62% at a similar time on Wednesday – the recent high was just shy of 1.78% on March 30.

Asian-Pacific equities were mixed on Thursday: the CSI 300 (-0.94%), the Hang Seng (-0.844%), the ASX 200 (+0.51%), the Kospi (+0.44%) and the Nikkei (+0.04%).


The US Dollar Index is consolidating this morning but the overall trend is downward; it was recently at 91.67, having turned lower from 93.44 at the end of March.

Although the other major currencies are also consolidating this morning, they have generally been on a front footing in recent days: the euro (1.1972), sterling (1.3780), the yen (108.91) and the Australian dollar (0.7719).

Key data
Key data already out this morning showed German final consumer prices (CPI) climbed by 0.5% month on month in March, compared with gains of 0.7% in February and 0.8% in January.

Later there is data on French CPI and a barrage of US data including retail sales, the Philly Fed and Empire State manufacturing indices, initial jobless claims, industrial production, capacity utilization, the Conference Board leading index, business inventories, the housing market index from the National Association of Home Builders (NAHB) and Treasury International Capital (TIC) long term purchases.

In addition, Federal Open Market Committee members Raphael Bostic and Mary Daly are scheduled to speak.

Today’s key themes and views
With the exception of nickel, the rest of the base metals are looking more upbeat suggesting little appetite to sell, or go short. The weaker dollar may be helping, as is the overall longer-term outlook that is supported by the combination of the promised infrastructure spending and the past seven to eight years of low capital expenditure in mining. While we are medium/long-term bullish we also see potential downside risks in the short term on the back of credit tightening in China, or as a result of a broader-based equity correction.

Gold’s rebound on Tuesday looks quite constructive – a weaker dollar and easier bond yields no doubt providing some support. But, key will be whether investors feel the need to take refuge in havens anytime soon.