Copper Fundamental Analysis – November 27, 2015 –Forecast

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Published: Nov 26, 2015, 10:32 UTC

Analysis and Recommendations: Copper gained 47 points to trade at 2.096 after US housing data and GDP showed strong growth and increased demand on metals.

Copper Fundamental Analysis – November 27, 2015 –Forecast

Analysis and Recommendations:

Copper gained 47 points to trade at 2.096 after US housing data and GDP showed strong growth and increased demand on metals. Palladium was up slightly on the US holiday trading at 553.40. Copper traded below the $2-level for a brief seven months at the height of the global financial crisis. It took just 18 months to climb its way back to a record of nearly $4.50.

Is today’s big bounce off the psychologically important $2-level (in the absence of any really positive development on commodity markets) the first signs of a bottom in the copper market?

Barclays recently put out a research report that compared copper and crude oil cycles going back to 1975.

Compared to previous downturns – the 1980s global economic slump, the late 1990s Asian crisis and the global financial crisis of 2008-2009 – the current bear market in oil and copper is already more severe.

Relative to their rolling five-year averages, the November average price for copper is down 36% (and at today’s price it’s just over 40%) and more than 50% below for oil. Copper’s decline matches the average maximum decline of 36% during the previous downcycle while oil is clearly overshooting on the downside, according to the study.

Copper has now traded at 20% or more below its prevailing five-year average for 10 months. According to Barclays during previous downturn the red metal spent 15 months in a bear market.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
	United States – Thanksgiving Day
NZD	Trade Balance (MoM) (Oct)	-963M	-937M	-1,222M
NZD	Trade Balance (YoY) (Oct)	-3,240M	-3,370M	-3,200M
AUD	Private New Capital Expenditure	-9.2%	-3.0%	-4.4%
EUR	GfK German Consumer Climate		9.2	9.4

Upcoming Economic Events that you should be monitoring:

Friday, November 27, 2015

Cur.	Event	Actual	Forecast	Previous
	United States – Day following Thanksgiving – Early close at 13:30
JPY	Household Spending (MoM) (Oct)		1.1%	-1.3%
JPY	Household Spending (YoY) (Oct)		0.1%	-0.4%
JPY	Jobs/applications ratio (Oct)		1.24	1.24
JPY	National Core CPI (YoY) (Oct)		-0.1%	-0.1%
JPY	Tokyo Core CPI (YoY) (Nov)		-0.1%	-0.2%
GBP	Nationwide HPI (MoM) (Nov)		0.5%	0.6%
GBP	Nationwide HPI (YoY) (Nov)		4.2%	3.9%
GBP	Business Investment (QoQ) (Q3)		1.5%	1.6%
GBP	GDP (YoY) (Q3)		2.3%	2.3%
GBP	GDP (QoQ) (Q3)		0.5%	0.5%