Copper Fundamental Analysis – week of July 25, 2016 -Forecast

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Published: Jul 23, 2016, 06:31 UTC

Copper is trading near its highest level at 2.236 with a gain of 0.22% this week and over 5% year to date. Additional demand as well as higher US housing

Copper Fundamental Analysis – week of July 25, 2016 -Forecast

Copper is trading near its highest level at 2.236 with a gain of 0.22% this week and over 5% year to date. Additional demand as well as higher US housing data helped support the metal, while hopes of stimulus from the Bank of Japan also boosted metals. Purchases of previously owned homes surged with help from first-time purchasers who have been slow to return to the market. Burgeoning wage growth and steady job gains, coupled with low mortgage rates, are giving those entering the market a lift just as investors step away. Demand for the most-expensive properties is strengthening on the back of all-time highs in the stock market that have buoyed wealthier Americans. Keeping a ceiling on sales is super-low supply — June marked 13 straight months of year-on-year declines in inventories. The group’s chief economist said June may have represented the high-water mark for 2016.

Copper prices dropped under pressure from a stronger U.S. dollar and an increase in production from China, the world’s largest copper consumer.

Chinese data that indicates a growing surplus in copper also weighed on prices and the outlook for the industrial metal. According to China’s National Bureau of Statistics, copper production in the first half of the year expanded by 7.6%, despite expectations that producers would cut back.

Meanwhile, demand for the industrial metal has slowed as China’s economic growth has failed to keep pace with its years of expansion. Copper prices tend to track economic data in China, since the country accounts for 45% of copper consumption.

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Major Economic Events for the week:

Date	Currency	Name	Volatility	Previous	Consensus
7/27/2016	AUD	Consumer Price Index (YoY)	3	1.3	1.1
7/27/2016	USD	Durable Goods Orders	3	-2.2	-1.1
7/27/2016	USD	Fed’s Monetary Policy Statement	3
7/27/2016	USD	Fed Interest Rate Decision	3	0.5
7/28/2016	JPY	BoJ Press Conference	3
7/29/2016	JPY	BoJ Interest Rate Decision	3	-0.1	-0.2
7/29/2016	JPY	BoJ Monetary Policy Statement	3
7/29/2016	EUR	Gross Domestic Product (YoY)	3	1.7	1.6
7/29/2016	EUR	Gross Domestic Product (QoQ)	3	0.6	0.3
7/29/2016	EUR	Consumer Price Index (YoY)	3	0.1
7/29/2016	EUR	Consumer Price Index – Core	3	0.9