London metal exchange (LME) copper prices rallied marginally on uptick in demand for riskier assets following a weaker dollar and evident stimuli from the world’s second largest economy china. China. China injected USD83 billion in net liquidity through open market operations (OMO) in 7 day and 28 day reverse repo’s. The Asian giant yesterday effected a 50 bps haircut on its commercial bank reserve requirement that allowed USD116 billion to be freed into the market. The next reserve haircut is expected on Jan 25. Dec18 Caixin/PMI index showed a very weak factory activity of 49.1 from 52.1, an autopsy of the Sino – US trade war breeding uncertainty.
*FUNDAMENTALS * LME COPPER: Three-month copper on the London Metal Exchange was up 0.1% at USD5,923/MT, extending a 0.4% rally from Tuesday session.
*BREXIT: Theresa May was thrashed in a 432-203 vote defeat which will trigger a vote of no confidence by Jeremy Corbyn that could see May’s day numbered. Uncertainty grips Britain as to the way forward which markets have now started to price-in. The Sterling (GBP) is wobbly despite a 0.09% rally after the vote finalized.
*JAPAN: Japans core machinery purchases for November edged lower 0.02% versus an expected 3.5% growth median signaling lower corporate spend as a result of the Sino -US trade war effects taking a toll on Asia.
*OTHER METALS: Shanghai nickel led the gains, rising as much as 1.5% to 93,100 yuan/MT, its highest since Dec. 3, tracking a 2.5% jump in London nickel on Tuesday.
*LITHIUM: Chile’s nuclear watchdog CCHEN is considering an investigation into potential fraud after an audit found that the agency for decades failed to properly record exports of ultralight battery metal lithium, documents obtained by Reuters show.
*BASE METALS PRICES 0142 GMT Three month LME copper USD5923 Three month LME aluminium USD1857.5 Most active ShFE aluminium 13355 Three month LME zinc 2474 Most active ShFE zinc 20570 Three month LME lead 1974 Most active ShFE lead 17500 Three month LME nickel 11620 Most active ShFE nickel 92970 Three month LME tin 20670 Most active ShFE tin 148470 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 515.69 LME/SHFE ALUMINIUM LMESHFALc3 -1267.93 LME/SHFE ZINC LMESHFZNc3 482.51 LME/SHFE LEAD LMESHFPBc3 1201.51 LME/SHFE NICKEL