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Base metals LME three-month lead prices were down by 0.1% at $2,293.50 per tonne at 5.58am London time this morning, but the rest of the complex was up by an average of 0.5%, led by a 0.6% gain in copper to $9,435 per tonne. Although lead was down slightly, it was one of the strongest metals last week, probably driven by the extreme high temperatures in parts of North America, which will be boosting demand for replacement lead-acid batteries.
The most-active SHFE base metals contracts were up by an average of 1.5% this morning, led by gains averaging 2.4% in the August contracts for aluminium, nickel and tin. The rest were up by an average of 0.6%, with August copper up by 0.8% at 68,880 yuan ($10,656) per tonne. October rebar was up by 1.6% and the September iron ore price on the Dalian Commodity Exchange was up by 5.1%.
Precious metals Spot precious metals were also higher across the board with gains averaging 0.5%, although gold was the laggard being up by only 40 cents per oz at $1,787.71 per oz.
Wider markets The yield on US 10-year treasuries has fallen further, it was recently at 1.42%, down from 1.46% at a similar time on Friday and down from 1.53% at a similar time last Monday.
Asia-Pacific equities were mixed on Monday: the Nikkei (-0.63%), the ASX 200 (+0.07%), the Kospi (+0.3%), the Hang Seng (-0.74%) and the CSI 300 (-0.53%).
Currencies The US Dollar Index is consolidating and was at 92.34 on Monday morning, down from 92.59 at a similar time on Friday. The dollar wobbled on Friday after the US employment report suggested the US Federal Reserve would not need to bring forward its tightening measures.
Major currencies were consolidating Friday’s gains this morning: the Australian dollar (0.7513), the euro (1.1854), sterling (1.3821) and the Japanese yen (111.13).
Key data Monday’s data will focus on services purchasing managers indices (PMI). China’s Caixin services PMI dropped to 50.2 in June, from 55.1 in May.
Later there is PMI data out across Europe and in the US. In addition, there is EU Sentix investor confidence data and, because last week’ meeting of the Organization of Petroleum Exporting Countries (Opec) and its Joint Ministerial Monitoring Committee ended in deadlock, that meeting is reconvening today.
Monday’s key themes and views Copper once again seems to be trying to resume its rally having been under pressure since peaking on May 10. Unusually, it has been one of the weaker metals of late and it is still vulnerable now, but if it can move back above $9,520 per tonne it will look more as if it has put in a base. The rest of the metals are looking more upbeat, however. What is odd is this is happening at a time when the auto industry is suffering. Last week’s US total vehicle sales data showed annualized sales of 15.4 million units in June, down from a peak of 18.5 million in April, the lowest level since August 2020.
Gold prices have been consolidating after the sharp sell-off in mid-June; prices broke lower last Tuesday, but have since recovered and are challenging resistance again. Weaker US treasury yields should be supportive, but the stronger tone in the US dollar over recent weeks may act as a headwind, unless the dollar starts to pull back.