Commodities Daily - April 9, 2021

> Oil holds steady as Saudis stress that OPEC+ can be nimble on supplies. Today, the market will be following the Iranian nuclear deal talks in Vienna, US PPI data for March, the weekly Baker Hughes US rig count update and coronavirus news. We expect Brent to remain range-bound at $62.8-63.8/bbl, although a break below and a correction to $61.2/bbl is more likely than a break above $63.8/bbl, as Iran and US could make progress in their talks.> Gold gains after Fed Chairman Powell's speech. During the Asian trading session today, gold slid to $1,750/oz, where it is quoted as we write. Investors will eye the latest US PPI data for March. We expect bullion to test support at $1,745/oz, which would open the path toward the $1,720/oz level.> Base metals up 0.8-1.2% on weakening dollar, falling Treasury yields; decline in aluminum, nickel and zinc stockpiles begins. The 3m futures for aluminum rose 1.0% to $2,283/tonne, copper 1.0% to $9,008/tonne, nickel 1.2% to $16,828/tonne, and zinc 0.8% to $2,855/tonne. Over the past week, overall stocks of aluminum, nickel and zinc decreased 1.6%, 0.7% and 2.1%, respectively. These draws indicate that the supply-demand balance in the aluminum, zinc and nickel markets has shifted toward a deficit, and stocks are decreasing amid rising consumer activity since the beginning of 2Q21. Meanwhile, copper stocks are increasing in China and on the LME (up 3.9% over the week), and thus the copper market looks to be in surplus.OIL HOLDS STEADY AS SAUDIS STRESS THAT OPEC+ CAN BE NIMBLE ON SUPPLIESBrent traded within a narrow $62.4-63.4/bbl range yesterday and eventually closed at $63.2/bbl, $0.04/bbl above the previous settlement price. Yesterday's weekly US jobless claims data surprised to the downside, highlighting that the US economic recovery is somewhat mixed, raising chances of a choppy road ahead despite a rebound in consumption and the widespread vaccine rollout. The coronavirus situation remains alarming in India (the world's third-biggest oil importer), which has reported a record number of daily Covid-19 cases, while several nations including the Netherlands are limiting the use of a Covid-19 vaccine due to potential complications.One of the main highlights yesterday was an interview with the Saudi energy minister, who said OPEC+'s recent decision to start gradually increasing production was a "good" one and noted that he does not see anything yet that disturbs him or his colleagues at OPEC+. The main takeaway for us was his affirmation that "if things go south, we can always easily reverse," as the deal includes a mechanism that allows production to "increase, freeze or decrease." This is what is discouraging oil bears from placing aggressive bets. Another important observation is that despite the OPEC+ decision to start adding more supplies, the Brent and WTI futures curve structures are exhibiting strength. The premium on the nearest global benchmark Brent contract against the following month has risen to its highest in a week, which indicates tightening supplies, as investors expect demand to prevail over supply.Today, the market will be following the Iranian nuclear deal talks in Vienna, US PPI data for March, the weekly Baker Hughes US rig count update and coronavirus news. We expect Brent to remain range-bound at $62.8-63.8/bbl, although a break below and a correction to $61.2/bbl is more likely than a break above $63.8/bbl, as Iran and US could make progress in their talks. Iran's chief negotiator said the sides were focusing on removing US sanctions in a single step, though he did not specify what Tehran was offering in return. The US has not yet responded to these LD GAINS AFTER FED CHAIRMAN POWELL'S SPEECHYesterday, gold rose above $1,755/oz and consolidated at that level as the 10y US Treasury yield slightly declined to 1.62%. EUR/USD also gained to 1.191, also boosting bullion. Fed Chairman Jerome Powell signaled yesterday that the Fed is not close to pulling back support for the US economy while noting that an expected rise in inflation this year should be temporary and warning that an uptick in Covid-19 cases could slow the recovery. This was basically more of the same rhetoric from the Fed. Gold prices were buoyed by the speech, while data supported them to touch the highest level in a month. US initial jobless claims were 744k last week, missing the consensus of 680k. This marked the second straight week of increases, bucking the streak of strong economic data.During the Asian trading session today, gold slid to $1,750/oz, where it is quoted as we write. Investors will eye the latest US PPI data for March. The risk is for a stronger than expected increase in the PPI (consensus is for a 0.5% rise), as was the case with the Chinese PPI recently. In addition, US wholesale inventories for February are scheduled to be released later today. We expect bullion to test support at $1,745/oz, which would open the path toward the $1,720/oz SE METALS UP 0.8-1.2% ON WEAKENING DOLLAR, FALLING TREASURY YIELDS; DECLINE IN ALUMINUM, NICKEL AND ZINC STOCKPILES BEGINSYesterday, metals ended the day with gains after the Fed minutes indicated continued support for the economy. The dollar was on the retreat and US Treasury yields declined, which boosted metals. The 3m futures for aluminum rose 1.0% to $2,283/tonne, copper 1.0% to $9,008/tonne, nickel 1.2% to $16,828/tonne, and zinc 0.8% to $2,855/tonne.In April, stocks of zinc and aluminum on the Shanghai Futures Exchange have begun to decline, while those of aluminum and nickel at LME warehouses have also started falling. Over the past week, overall stocks of aluminum, nickel and zinc decreased 1.6%, 0.7% and 2.1%, respectively. These draws indicate that the supply-demand balance in the aluminum, zinc and nickel markets has shifted toward a deficit, and stocks are decreasing amid rising consumer activity since the beginning of 2Q21. Meanwhile, copper stocks are increasing in China and on the LME (up 3.9% over the week), and the copper market looks to be in surplus. In the absence of major news today, the dynamics of the dollar and reports on metal stocks will drive metals price movements today. At the moment, the backdrop looks