Zinc yesterday settled flat at 109.70 last week support seen as both UK home price index and German's retail sales data were upbeat, and US Fed officials eased market concerns, boosting investor risk appetite. Also Fed official Jeremy Stein stated overnight that whether the Fed will quit QE3 will depend on long-term economic progress, rather than near-term economic data, but hinted the Fed will begin to take action in September at the earliest if US economy maintains mild recovery, causing expectations over QE end to grow. In this context, the US dollar index broke through 83, weighing down stocks and base metals prices. But as University of Michigan's June CCI for US hit a record high of 81.4 since July 2007, financial markets were boosted. After the EU summit ended, the Fitch and Standard & Poor's downgraded Cyprus' credit rating to show negative effects of debt transposition and write-down by the country. But the two rating agencies pointed out that since the country's bond transposition plan underway has not caused substantial effects on the market, its rating will be raised once the bond transposition plan is completed. While CBRC President Shang Fulin said at the Lujiazui Forum that the banking sector has been subject to liquidity tightness recently, but the sector actually did not fall short of liquidity. Since liquidity tightness has eased, domestic banking sector will continue to move steadily. But the industry should enhance risk management, structure adjustment and business transformation. Technically market is getting support at 109.40 and below same could see a test of 109.10 level, And resistance is now likely to be seen at 109.90, a move above could see prices testing
110.10.

Trading Ideas:

Zinc trading range for the day is 109.2-110.2.

Zinc settled flat as support seen as both UK home price index and German's retail sales data were upbeat

Fed official Jeremy Stein stated that whether Fed will quit QE3 will depend on long-term economic progress, rather than near-term economic data

Zinc weekly stocks at Shanghai exchange came down by 9059 tonnes