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Copper Fundamental Forecast – August 1, 2016

By:
Barry Norman
Published: Jul 29, 2016, 12:55 UTC

Copper declined 4 points on the lack of stimulus from the BoJ to trade at 2.205. Bank of Japan Governor Haruhiko Kuroda on Friday again ruled out the

Copper Fundamental Forecast – August 1, 2016

Copper declined 4 points on the lack of stimulus from the BoJ to trade at 2.205. Bank of Japan Governor Haruhiko Kuroda on Friday again ruled out the possibility of the BOJ introducing “helicopter money,” a policy in which the central bank directly purchases government bonds.

At a press conference after the central bank decided to carry out additional monetary easing in a modest manner, Kuroda said the BOJ is “not considering at all” underwriting government bonds to fund stimulus measures.

While the BOJ has been buying a large amount of government bonds through financial markets for years to pour more money into the economy, what the central bank has been doing is a “policy mix” with fiscal spending and is “completely different from so-called helicopter money,” Kuroda added.

Base metals prices continue to pull-back as the consolidations deepened. By the close prices were down an average of 1.3 percent, led by 2.9 and 2.3 percent losses in zinc and lead respectively, while copper was off 1.7 percent at $4,834. Aluminum, nickel and tin were down between 0.1 and 0.4 percent. Precious metals were mixed ahead of the FOMC meeting, they had a muted initial reaction to the FOMC statement, which said near-term risks to the economic outlook have diminished, but then in the late hour prices rocketed higher, helped by a weaker dollar. They closed with average gains of 2.9 percent, led by a 4.5 percent rally in platinum, with the rest up between 1.5 and 3.6 percent, with gold prices closing at $1,338.75.

This morning, the base metals have started to rebound, again helped by a weaker dollar, with prices up 0.7 percent on average, Nickel leads the rebound with a 1.4 percent gain to $10,475, copper prices are up one percent at $4,884 and the rest are up between 0.3 percent for tin and 0.7 percent for zinc. Volume has been average at 4,858 lots.

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Upcoming Economic Events that you should be monitoring:

Monday, August 1, 2016

Country Name Volatility Previous
AUD AiG Performance of Mfg Index 2 51.8
AUD TD Securities Inflation (YoY) 2 1.5
AUD TD Securities Inflation (MoM) 2 0.6
CNY Non-manufacturing PMI 2 53.7
AUD HIA New Home Sales (MoM) 2 -4.4
CNY NBS Manufacturing PMI 2 50
CNY Caixin Manufacturing PMI 2 48.6
EUR Markit Manufacturing PMI 2 53.7
EUR Markit Manufacturing PMI 2 51.9
GBP Markit Manufacturing PMI 2 49.1
USD Markit Manufacturing PMI 2 52.9
USD ISM Manufacturing PMI 3 53.2
USD ISM Prices Paid 3 60.5
USD Construction Spending (MoM) 2 -0.8

Government Bond Auctions

Date/Time Country Type

Aug 2   JPY                  10-Year JGB Auction                          -0.243%

Aug 2   USD                4-Week Bill Auction                           0.270%

 

 

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