London Metal Exchange three-month base metals prices were down at the close of trading on Wednesday July 22 following news that China's central bank will cease its monetary easing activity amid fears that it would over-stimulate its economy while it recovers from the Covid-19 pandemic.
The People's Bank of China injected 1.81 trillion yuan ($259 billion) of new loan liquidity on July 10. Following that, the country's better-than-expected economic recovery in the second quarter of 2020 led policy makers to pause the economic stimulus for fear of a debt surge.The effect of this on LME base metals futures was clear in the afternoon session on Wednesday, with all base metals with the exception of tin closing down from the previous day, after a rally spurred by EU fiscal stimulus optimism."We think the bullish factors supporting the run higher may have overstayed their welcome. The complex is undergoing a much-needed technical consolidation...