Friday began with much promise, with aluminium leaping to a high of 2825 in the first hour of trading in London after a Thursday close back above the 100-day moving average and inventory falls on the SHFE. The move had less to do with fresh fund allocations for the new month – of which none were reported – though more with June’s options expiry this Wednesday, with delta hedgers running for cover in a rising market. In the end, however, proceedings were dominated by dollar strength after a raft of positive readings from the US economy. The rally fizzled out as the morning sessions got underway and while economic growth was ultimately healthy for (metals) consumption, the stronger greenback pressured prices in the afternoon. Strike talk in Chile supported copper at lower levels, while the light metal bottomed at 2780 in the aftermarket.
Nearby contangos were marginally easier, while beyond 3-months movement was limited with 2009 tightening by $2.00/mth and 2010 easing by same, reversing the previous day’s action. The LME’s WC warrant banding report was now bereft of holdings.
So far on Monday morning activity had been dull in extremis, with prices dawdling in a $10-range for most of the premarket circa the 100-day moving average at 2787. Volumes were no better than 900 lots at time of writing with values just picking up to 2796 as we signed off. The continuation of a broad sideways pattern was keeping Cliff Green Consultancy sidelined, with the trading strategists looking for a breach either of resistance at 2850/60 or of support around 2715/35.
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