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This morning’s broadly positive performance follows reports on Wednesday that a partial US-China trade deal may be nearing. This despite comments from US President Donald Trump a day earlier that he was prepared to wait until after next year’s presidential elections to reach a deal.
In the latest development, Bloomberg News reported that US negotiators expect a phase one deal to be signed before December 15, the day when the US is expected to impose additional tariffs on Chinese goods.
“The [Bloomberg] report goes on to suggest that a Phase 1 agreement can still be agreed prior to the December 15 deadline when, as things stand, the US is due to impose 15% tariffs on a further $160 billion or so of Chinese imports – most of them consumer goods,” National Australia Bank’s head of foreign exchange strategy Ray Attrill said in a morning note.
“Trump reported that trade talks are now going “very well”, which was a turnaround from the previous day when he said a deal may not be reached until after the elections,” ANZ Research analyst John Bromhead said in a morning note.
“Base metals rallied, with copper and zinc up strongly amid hopes of a US-China trade deal,”Bromhead added.
Zinc, as it did on the London Metal Exchange at the close on Wednesday, led the charge higher among the base metals. The metal’s most-traded January contract on the SHFE climbed to 17,990 yuan ($2,548) per tonne as at 10.25am Shanghai time, up 150 yuan per tonne – or 0.8% – from Wednesday’s close of 17,840 yuan per tonne.
Gains across the rest of the complex were more subdued, however: January copper gained 190 yuan per tonne – or 0.4% – to 47,170 yuan per tonne this morning, January lead inched up by 30 yuan per tonne – or 0.2% – to 15,055 yuan per tonne and February nickel was up by 140 yuan per tonne – or 0.2% – to 104,220 yuan per tonne.
Meanwhile, January tin and aluminium registered losses of 0.5% and 0.2% respectively.
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