Aluminium settled up 0.4% at 112.4 as the timing of QE3 wind-down is thus expected to be delayed from late this year to next March. US non-farm payrolls added 148,000 in September, well below expectations for an 180,000 increase. This sparked concerns that US economy has lost upward momentum, but also raised anticipation that the Federal Reserve will keep QE3 in place till next March. As a result, the US dollar index slid to 79.18, lifting LME aluminum. LME aluminum hit a 2-month high of USD 1,890.8/mt after starting Tuesday at USD 1,850/mt. The light metal fell slightly at the tail of the session as some longs took profits, but still closed the day up USD 24.5/mt or 1.32% at USD 1,877/mt. The US added 148,000 workers to non-farm payrolls in September, below expectations for an 180,000 increase and falling short of forecasts for three months in a row. Although the US unemployment rate fell to 7.2% from 7.3%, this is not a reflection of recovery in the US economy, as the data has been flattered by lower labor participation rate. Worse-than-expected non-farm employment offered some relief to investors who feared earlier that the Fed might wind down QE3 before 2014. It is rumored that the Fed may even increase the scale of QE3. Sources indicated that the People's Bank of China (PBOC) suspended 14-day reverse repurchase operation in open market last Thursday and did not launch 7-day reverse repos yesterday, either, citing faster than normal growth in credit lending in September. Technically market is under fresh buying as market has witnessed gain in open interest by 6.02% to settled at 1619 while prices up 0.45 rupee, now Aluminium is getting support at 111.8 and below same could see a test of 111.1 level, And resistance is now likely to be seen at 113.4, a move above could see prices testing 114.3.

Trading Ideas:

Aluminium trading range for the day is 111.1-114.3.

Aluminium gained as the timing of QE3 wind-down is thus expected to be delayed from late this year to next March

Worse-than-expected non-farm employment offered some relief to investors who feared earlier that the Fed might wind down QE3 before 2014.

Aluminium daily stocks at Shanghai exchange came down by 3545 tonnes