After three days of weakness the base metals had a day of...

After three days of weakness the base metals had a day of consolidation on Thursday, but although prices ended up on the day, with the exception of lead, the buying seemed half-hearted again. If the funds had been involved then you would have expected the rebound to have been more aggressive. Even zinc only managed to close $10/tonne up on the day, which suggests the market is not that confident. Copper stocks also rose another 3,875mt taking the total to 129,600mt, but again the deliveries were all into the Asia. The ongoing lack of metal in LME warehouse in Europe and the US is, however, a cause for concern and it may well support prices in the near term. That said, the backwardation remains stable so perhaps there is enough metal around for consumers. Also if the markets are under pressure from fund selling, then the immediate fundamentals may take a back seat.

Bank of Japan did signal that it was ending its ultra loose monetary policy, but still left interest rates unchanged at 0.25%. The lack of actual change may have helped settle the markets on Thursday, but their change of policy means the market has been warned. Whether this encourages funds to start to unwind yen-carry trades remains to be seen. On the charts prices are hanging awkwardly just above recent lows (with the exception of zinc), which means the lows are now within easy reach should selling emerge. Equities are generally under pressure, including the miners and the dollar has been on the rise again and may be poised to break above the 91 level on the dollar index. All eyes however will be on the US employment data out at 1:30pm GMT. Non farm pay rolls are expected to increase 220,000, with the unemployment rate staying at 4.7%.