Base metals looking mixed, aluminium spreads tighten

The base metals were for the most part firmer on Tuesday, June 14, with aluminium closing up 1.6 percent at $1,599.50. In Shanghai, the base metals are for the most part little changed.

Equities remain on a back footing as the market gets more cautious ahead of the Brexit vote, the Euro Stoxx 50 was down two percent yesterday and the Dow closed off 0.7 percent. In Asia, the Nikkei is down 1.1 percent, the Hang Seng is off 0.1 percent, the ASX 200 is down 1.9 percent, the Kospi is down 0.4 percent, but the CSI 300 is up 0.1 percent.

In FX, the dollar index is last at 94.44 and seems to be consolidating recent gyrations, the euro is at 1.1288, sterling is weak at 1.4182, the yen is extremely strong at 105.91, the high in May was 105.54 and the aussie is edging higher at 0.7402.

The yuan continues to weaken, last at 6.5970 but most of the other emerging market (EM) currencies we follow are consolidating recent gains. So for now, although we are wary of the weakening yuan, alarm bells are not ringing in other EM currencies.

The economic calendar is busy, Japan’s revised industrial production show growth of 0.5 percent from an earlier reading of 0.3 percent, at 9:30 BST there is a host of UK price data including CPI, PPI, EU data includes industrial production and employment change and US data reports retail sales, small business index, import prices and business inventories.

The base metals are looking quite mixed. Aluminium rebounded higher on the close as the spread tightened with cash-July going out to a backwardation of $6.25-8, a sure sign of last minute June date position rolling; whether prices can hold on to their gains is another question.