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United Kingdom Prime Minister Boris Johnson on Tuesday signaled that he will not soften his Brexit stance and said he is seeking to rule out any extension of an end-of-2020 deadline to strike a trade deal with the European Union.
Markets viewed this as generally increasing the possibility of a no-deal Brexit on 31 December, 2020.
“Prime Minister Johnson’s Brexit comments caused alarm in markets, but stronger data from the US helped the mood somewhat,” Rahul Khare, analyst at ANZ Research, said in a morning note.
Building permits – a gauge of future construction activity and thus metal demand – in the US rose to a seasonally adjusted annual rate of 1.48 million in November, surpassing the forecast 1.41 million. Housing starts also exceeded expectations last month at 1.37 million, compared with the projected 1.34 million.
US industrial production rose more than expected in November with a 1.1% month-on-month gain, surpassing analysts’ projections for a 0.8% increase, while the capacity utilization rate was largely in line with expectations at 77.3% but up from 76.7% previously.
Despite the firmer-than-expected data, the SHFE base metals were mixed this morning, with nickel giving the worst performance of the complex.
The most-traded February nickel contract fell to 109,740 yuan ($15,680) per tonne as at 11.30 am Shanghai time, down by 1,540 yuan per tonne – or 1.4% – from Tuesday’s close of 112,280 yuan per tonne.
February copper and February zinc were both down by 0.4% at 48,960 yuan per tonne and 17,960 yuan per tonne respectively. February lead was flat at 14,945 yuan per tonne, while February aluminium (14,115 yuan per tonne) and May tin (139,610 yuan per tonne) rose by 0.7% and 0.6% respectively.
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