London 29/04/2016 - Base metals ended Friday in positive territory on the LME, with continued dollar weakness fuelling today's rally, traders said.
The Bank of Japan (BOJ) wrong-footed markets on Wednesday by deciding to keep its monetary policy unchanged. The lack of additional stimulus measures lead to a sell-off in the Nikkei, which closed 3.61 percent lower, and a spike by the yen.
As well, the US Federal Reserve maintained its low nominal interest rates and did not signal to markets that another rate rise was imminent.
The dollar weakened in response - the dollar index was last at 93.17.
"It seems that the path of least resistance for most commodity markets is higher still, as the dollar selloff shows no sign of easing," INTL FCStone analyst Edward Meir said.
"With the Fed effectively taking itself out on the rate hiking business - at least until June and maybe beyond that- dollar shorts will become more aggressive and likely capitalize on perceptions of relative tightening by foreign central banks," he added.
In today's data, the US Core PCE price index for March was in line with forecasts at 0.1 percent and the employment cost index in the first quarter at 0.6 percent was also as forecast.
Personal spending in March at 0.1 percent was below the estimate of 0.2 percent while personal income at 0.4 percent beat the expected 0.3 percent.
University of Michigan consumer sentiment undershot at 89 while inflation expectations at 2.8 percent were better than forecast.
The market will now await Chinese data releases over the weekend. On Sunday the country will release its manufacturing PMI data, which could provide clarity on growth there. The outcome is likely to be reflected in next week's price moves.
Both the LME and the SHFE are closed on Monday for national holidays.
In the metals, copper concluded at $5,051, up $109 and its highest in a week. Volumes were robust - more than 21,000 lots changed hands on Select by the kerb close.
Inventory moves were supportive - stocks fell a net 1,225 tonnes to 149,500 tonnes while cancelled warrants increased 2,275 tonnes to 34,275 tonnes.
Spreads have tightened for the nearby dates, with the sensitive 'Tom'/Next date last at a backwardation of $2.60. A backwardation is also evident in dates out to July.
Meanwhile, deliverable copper stocks at SHFE warehouses dipped 19,795 tonnes or six percent week-on-week to 311,894 tonnes.
Aluminium ended at $1,678, up $13 and around its highest since July. Stocks fell 6,750 tonnes to 2,645,725 tonnes and cancelled warrants were 2,350 tonnes lower at 1,217,000 tonnes.
Nickel climbed above $9,500 earlier - its strongest since November. It concluded at $9,445, still up $150. Stocks rose 1,686 tonnes to 417,438 tonnes.
Zinc closed at $1,938.50, an increase of $26.20 and a one-week high; stocks and cancelled warrants both fell 2,525 tonnes to 404,275 tonnes and 37,650 tonnes respectively.
Lead concluded %54 higher at $1,805, also its strongest in one week. Stocks were little changed, down 75 tonnes to 175,025 tonnes, and cancelled warrants slipped 375 tonnes lower to 78,950 tonnes. They jumped earlier this week by than 70 percent, which has been attributed to a trading house squeezing the market.
Spreads have reflected the downturn in on-warrant stocks - cash/May was at a backwardation of $5 and cash/July at $0.60.
Tin at $17,220 was up $130 even after stocks rose 720 tonnes to 5,575 tonnes, the highest since January.
Steel was last indicated at $65/115 and cobalt and molybdenum at $23,500/24,000 and $13,300/13,800 respectively.
(Additional reporting by Kathleen Retourne and Dalton Barker, editing by Mark Shaw)