MF Global Daily Report: Base Metals (Sept. 16, 2011)

Sept. 16 (MF Global) -- This market comment was written at 8:15 a.m. on September 15th, US east coast time...

Metals prices retreated yesterday, as the complex did not participate in the generally firmer tone we saw in a number of other markets. Energy prices finished higher, the dollar fell, and US stocks advanced to their third consecutive gain. The stronger tone was likely attributable to more positive perceptions about what is going on in Europe. Since there are no substantive proposals floating around (at least none that have been made public), investors have had to console themselves by focusing on relatively trivial nuances, such as whether or not a statement was going to be issued by EU leaders, as was the case on Tuesday. (It was not). In Wednesday's session, investors were apparently impressed that German and French leaders had a conference call with the Greek prime minister, with the leaders announcing that Greece was an "integral" part of the Eurozone and that it should implement all its financial reforms "strictly and effectively". For their part, the Greeks are saying that they are on track to fulfill their targets and should be able to receive the next €8 billion of aid that they need in order to avoid default, presumably once a "troika" team arrives in the Greek capital over the next few days and signs off on the release.