US Treasury published General License 14 allowing US and non-US individuals to trade with Rusal and its subsidiaries in specified transactions until October 23, 2018, fact that erased any support from supply concerns side. Aluminium dropped more than 7% around $180, finishing below the $2,300 level, and experiencing almost $300 intraday volatility. Cash to 3 months carry dropped to $3.50 contango. This morning aluminium keeps dropping, already almost 2%. Nickel dropped around 4.5%, or $650, trading intraday, trading below the $14,000 level, erasing all last week’s gains, again fighting to keep the $14,000 support, or could go into the previous horizontal channel $13,000-14,000. Copper also dropped some 0.67%, and kept trading within the $6,900-7,100 range, and has the wider range between the $6,600 and $7,200 range, closing around the 100-day moving average. Zinc finished unchanged having touched intraday the $3,200 level, acting as the closest support. Full spread finished valued at $13.5 contango. Lead dropped 1.7%, trading close to the $2,300 support level, and dropping below the level could result into a major drop of around $100. Cash to 3 months carry finished valued at $9.25 contango. Tin also suffered from fundamentals and Rusal related news and dropped more than 3% being traded intraday below the $21,000 level.
Gold lost ground yesterday after the US treasury allowed US individuals to deal with Russia in specified transactions. Together with the imminent meeting between both Koreas with the denuclearization of North Korea in mind released geo-political support to prices. From the currency side, US bonds supported USD which rose against a basket of major currencies with EUR dropping some 0.55% and GBP down some 0.4%, which brought some pressure to the group. On top of that, expectations of 3 more US interest rates in 2018. Silver dropped dramatically after losing the $17 support level, and came back to the $16.60, where found some buying activity after going through the $16.80 without looking back.
Platinum maintained the same levels as last week, above the $900 experiencing very thin trading. Palladium on the other side experienced a lot of pressure after the US Treasury published a list of US individuals allowed to trade with Rusal and its subsidiaries, releasing the support based on supply concerns.
Oil rose again overnight due to concerns about supply and strong fundamentals from the demand side. Brent traded at $75.16 and WTI trading at $69.22 on the June contract.
EUR and GBP dropped against the USD again yesterday on Friday, some 0.57% and 0.46% respectively. Euro traded at 1.2216, having the closest support at 1,2200, level from which it has been bouncing back up since January. GBP was trading at the lowest of the month, having the main support around the 1.38 area. This morning EUR is trading at 1.2215 and GBP at 1.3940.
DJI traded water and finished almost unchanged, dropping some 0.07% intraday, trading above the 12,500 level. DJI rose some 0.1% but failed to trade above the 24,500 area. Asian markets finished mixed yesterday, with Nikkei dropping 0.33%, Hang Seng up 1% and Shanghai Composite at +1.87%.
German Ifo Business Climate at 09.00. UK Public Sector Net Borrowing at 09.30, CBI Industrial Order Expectations at 11.00. US HPI and S&P/CS Composite-20 HPI at 14.00, CB Consumer Confidence and New Home Sales at 15.00.
This report was written at 7:30. All times referenced are GMT.
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