Metals Update – Feb 03 2023

US Fed decision weakens Dollar – Industrial Metals Cheaper for Non-Dollar Denominated buyers

The U.S. Federal Reserve announced on Wednesday that it has reached a turning point in its fight against inflation, giving investors hope that its rate-hike campaign is about to come to an end. Markets took this as an indicator of future dollar weakness. The demand for copper is anticipated to increase due to a predicted weak currency and China’s supporting economic policies, it was stated.

Thursday saw an increase in the price of copper on the LME as holders of foreign boosted demand for the metal on the back of a weakened dollar. Three-month copper on the London Metal Exchange CMCU3 climbed 0.37% to $9,118 per tonne by 12 p.m. GMT, while the most actively traded March copper contract on the Shanghai Futures Exchange SCFcv1 decreased 0.16% to 69,563 yuan ($10,344.25).

Lead CMPB3 fell -0.58% to $2,125 a tonne, tin CMSN3 was down 2.30% to $28,813 a tonne, and zinc CMZN3 was virtually flat at $3,350.50 a tonne on their LME Benchmarks.

EU Manufacturing sees light at the end of the tunnel – Energy Costs, Inflation falls prove supportive

A carefully monitored survey on Wednesday revealed that the industrial slowdown in the Eurozone continued to moderate in January as energy prices stabilised.

The S&P Global Eurozone Manufacturing PMI increased in January from 47.8 in December to 48.8 for the third consecutive month. It was the highest number since August, although it is still under the threshold of 50.0, which is neutral.

When interpreting these numbers, a number of 50.0 or higher implies expansion, while one below that indicates contraction.

The manufacturing output index also increased, reaching a seven-month high of 48.9 from 47.8.

In each of the individual nations, the manufacturing PMI was 50.5 in France, 50.4 in Italy, and 48.4 in Spain. The PMI in Germany, the biggest economy in the EU, was 47.3, which was slightly higher than the flash estimate of 47.0.

Calendar of Events

Feb 3, 2023

French Industrial Production MoM (Dec)

Feb 6, 2023

German Factory Orders

Feb 7, 2023

German Industrial Production MoM (Dec)

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