SHANGHAI, Mar 21 (SMM) - Last night, ECB President Christine Lagarde said that the turmoil in the financial markets would not prevent the ECB from fighting against inflation. The ECB raised interest rates by 50 basis points last Thursday and said it would take into account inflation and financial stability in subsequent rate decision. Credit Suisse and UBS could receive a relief of more than 260 billion Swiss francs ($280 billion) from state and central bank, which is equivalent to one-third of Switzerland's gross domestic product. This is only a part of Switzerland's efforts to weather the global financial turmoil.
Overnight, LME zinc opened at $2,935/mt and closed down $35/mt or 1.19% at $2,898/mt. The trading volume was 6,607 lots, and open interest added 901 lots to 184,000 lots. LME zinc lacked momentum as bearish sentiment intensified propelled by risk aversion. LME inventory declined by 350 mt to 37,375 mt. Despite the small decline, the LME zinc inventory generally showed an upward trend. Although Credit Suisse and the First Republic Bank received the bailout, traders were still concerned about a lack of systemic liquidity against interest rate hikes. As a result, the market was still filled with bearish sentiment.
The most-traded SHFE 2305 zinc contract opened at 22,410 yuan/mt in overnight trading and settled at 22,350 yuan/mt, down 75 yuan/mt or 0.33%. Trading volume stood at 45,000 lots, and open interest gained by 1,813 lots to 91,000 lots. The turmoil in the banking sector has added to the risks of bank failures and a slowdown in economic growth. The bearish macro sentiment overseas weighed on both LME zinc and SHFE zinc prices. On top of that, the expected increase in the supply of domestic zinc ingots in March also provided weak support for SHFE zinc pric
