MF Global Daily Report - 2011/10/18 Base Metals

Oct. 19 (MF Global) -- This market comment was written at 8:30 a.m. on October 18th, US east coast time...

Copper prices retreated from a three-week high yesterday, leading the rest of the metals lower after Germany's Finance Minister blindsided investors by saying that an upcoming EU summit may not produce a "definitive solution" to the Euro zone debt crisis. While that possibly may be true, we find little merit in the minister publicly formulating such a negative conclusion in advance of the formal unveiling of the long-awaited proposals. All his statement did was to sap confidence from already fledgling markets, leading to the abrupt reversals we saw. In addition to metals selling off, the Euro also gave up an earlier advance to finish lower, as did the US stock market, with the Dow losing a stunning 250 points on the day. Less-than stellar earnings reports from the likes of Wells Fargo and Citigroup only amplified the equity losses.