Against the Grain

The metals surfed the equity wave higher in Asian time and in the present market conditions it seems the economic data induced selling has run its course and technical indicators are overstretched. So it was no surprise London saw metals open with good gains.

The LME stock figures were mixed with cu, al and sn down the others up. After that prices were stuck in the mud with a weaker US$ the major support. The IAI reported Jul unwrought al stocks at 1.192 mill tonnes (Jne 1.189 mill tonnes). As al stocks grow it will be interesting to see if the weather in China has effects its output. Bloomberg reports the Chinese state research group Antaike saying pb demand was up 6.8% in H1 at 1.78 million tonnes compared to 16.5% growth in ’09. Total ’10 usage will be up 8.3% at 3.61 million tonnes however vehicle sales are expected to grow at 17% this year to 16 million units compared to 49% growth in ’09.Cu moved higher into the US open as buyers like a wound spring rushed back in after the jobless data showed improvement. The US$ weakness is attributed to worries that Japan might move to act against the strengthening yen. If traders equity surfed today they came badly unstuck as the US$ grabbed the limelight. On the day metals and oil outperformed the pack, led by tin.

In Europe the Spt German GfK consumer sentiment improved to 4.1 (Aug 3.9) while Italian Aug consumer confidence slipped to 104.1 (105.5). The Aug UK CBI reported sales was a strong 35 (33). In the US weekly jobless claims 473 k (504 k).