By: William Adams

London 25/01/2013 -Despite some encouraging economic data yesterday in China, Europe and the US, the metals did not all respond well. Zinc, lead and tin climbed by an average of 0.7 percent, while copper, aluminium and nickel closed down an average of 0.5 percent. Precious metals closed down with average losses of 0.8 percent. The better economic data still seems to be spooking precious metals traders into thinking that the Fed will halt QE sooner rather than later. However, the fact that the good data did not lift copper is noteworthy – it suggests there is good supply above the $8,000 level.

That said, this morning the base metals are up an average of 0.8 percent so it looks as though Asia has reacted more positively to yesterday string of better data. Lead and zinc are up one percent, or more, while the rest are 0.7 percent higher, with copper at $8,131.

Precious metals are up an average of 0.4 percent with gold at $1,671.60, having been as low at $1,663.15 earlier this morning.

In Shanghai the April contracts on the base metals are on average up by 0.6 percent with zinc leading the way with a 1.1 percent rise to Rmb 15,635, lead is up 0.8 percent at Rmb 15,460, copper is up 0.4 percent at Rmb 58,640, while aluminium is unchanged at Rmb 15,225. Gold is unchanged at Rmb 340.31/g, while rebar is up 0.9 percent at Rmb 4,003.

Spot Changjiang copper is up 0.3 percent at Rmb 58,050-58,250, so remains in contango, while the LME/Shanghai arb window remains closed with the ratio at 7.22.

Equities – yesterday the Euro Stoxx 50 and Dow were up by 0.5 percent and 0.3 percent, but the picture in Asia is mixed with the Nikkei up 2.9 percent, while the rest are off with the Hang Seng down 0.3 percent, the MSCI Asia Apex off 1 percent and China’s CSI 300 off 0.4 percent.

Currencies – the euro is strong at 1.3410, the highest it has been since February 2012, the dollar index remains lacklustre at 79.85, the aussie is weaker at 1.0457, as are cable at 1.5788, the yen at 90.54, while the yuan is little changed at 6.2205.

The economic agenda is fairly light today with the German Ifo business climate index, UK GDP, UK index of services and in the US new home sales – see table attached.

Our outlook remains the same, we remain mildly bullish across the metals and yesterday’s good economic data supports our stance we feel. Although the better economic outlook may well make investors feel less in need of safe-havens, we feel currency weakness and potential for on further quantitative easing, whether it be in Japan, China, Europe or even the US, are likely to continue to make creditors nervous of currency debasement.

Metals Overnight Performance
GMT7:38 AM+/-+/- %Lots
Cu8131560.7%2572
Al2085.7515.250.7%519
Ni174571170.7%122
Zn210824.251.2%1440
Pb2412241.0%978
Sn248001700.7%35
Steel 34000.0%Total lots
 Average (BM ex-Steel)0.8%5666
Gold1671.634.180.3% 
Silver31.740.110.3% 
Platinum1684100.6% 
Palladium725.542.540.4% 
 Average PM0.4% 

 

 

Economic Agenda
GMTCountryDataACTUALExpectedPrevious
9:00am
GermanyGerman Ifo Business Climate 103.1102.4
Day 3ALLWEF Annual Meetings   
9:30amUKPrelim GDP q/q -0.1%0.9%
9:30amUKIndex of Services 3m/3m 0.5%1.1%
3:00pmUs New Home Sales 387K377K
 
 
 
 
 
 

 

 

Connect with other traders

Join our FXStreet Events300 people are enjoying our monthly FXStreetEvents worldwide... check our cities and book your seat!

Most Popular Content

  1. EUR/USD falls below 1.1300 after US data
     by FXStreet Feb 26, 13:44 GMT
  2. EUR/USD keeps falling, eyes on 1.1230
     by FXStreet Feb 26, 14:18 GMT
  3. EUR/USD focus shifts to the downside, ECB set to launch QE
     by FXStreet Feb 27, 16:22 GMT
  4. EUR/USD hits 1-month low
     by FXStreet Feb 26, 15:18 GMT
  5. EUR/USD breaches 1.1200
     by FXStreet Feb 26, 18:16 GMT
  1. EUR/USD focus shifts to the downside, ECB set to launch QE
     by FXStreet Feb 27, 16:22 GMT
  2. ECB meeting forecast: Waiting for the QE purchases to start
     by Danske Bank A/S Feb 27, 09:00 GMT
  3. Greece Buys Gold Sovereigns as New Greek Drachmas Unveiled
     by GoldCore Gold Bullion Feb 27, 12:58 GMT
  4. Major Foreign Exchange Discussion
     by Tip Tv Feb 27, 14:02 GMT
  5. Portugal: The recovery is progressing faster than forecast
     by BBVA Bancomer Feb 27, 13:38 GMT
  1. Trade it or lose it
     by ORE Feb 26, 16:30 GMT
  2. EUR/USD focus shifts to the downside, ECB set to launch QE
     by FXStreet Feb 27, 16:22 GMT
  3. Watch today: Greek GDP, European inflation
     by ZuluTrade Feb 27, 08:26 GMT
  4. EURUSD: Beware the Bounce!
     by FOREX.com Feb 26, 15:25 GMT
  5. EURUSD Could Continue To Downside In Sessions Ahead
     by EW-Forecast Feb 27, 08:17 GMT

Traders Tools

Forex Studies

Monitor the markets with our customizable FX studies.

Economic Calendar

Live economic events calendar