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Copper Fundamental Forecast – August 31. 2016

By:
Barry Norman
Published: Aug 30, 2016, 13:32 UTC

Copper is trading flat as we move into the end of the month and the last of vacation season. There has been little to effect metals lately with the

Copper Fundamental Forecast – August 31. 2016

Copper is trading flat as we move into the end of the month and the last of vacation season. There has been little to effect metals lately with the Federal Reserve rate increasing stealing the show. Copper remains at the bottom of its trading range at 2.079. Bloomberg reported that copper prices were at their lowest in two months after stockpiles surged and Barclays Plc flagged concern over growth in China, the world’s biggest consumer.

Inventories tracked by exchanges in Shanghai, London and New York climbed five straight days last week to the highest since May. Barclays said in a report that a recent slump in the copper market “may be an early warning sign of weakening in China’s economic momentum.” Futures have fallen for four of the past five weeks on the Comex.

Hedge funds and other large speculators held a net-short position of 4,991 U.S. copper futures and options contracts in the week ended Aug. 23, according to Commodity Futures Trading Commission data released three days later. They switched from a net-long position of 2,237 a week earlier.

Copper has wiped out all of its gains this year, lagging behind other metals, as supply continues to outstrip demand. Holdings in warehouses tracked by the London Metal Exchange climbed every day last week to the most since 2015 on Friday, with stockpiles in Asia surging to the most since 2013. The metal is likely being exported from China to the LME’s Asian warehouses to take advantage of more favorable premiums, Barclays said in its report, dated Aug. 28.

Chinese growth is forecast to slow to 6.5 percent this year, the weakest since 1990. Copper will be in “substantial surplus” for at least the next two years as a “huge wave of new mine supply hits the market,” according to Barclays.

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Upcoming Economic Events that you should be monitoring:

 August 31, 2016

Country Event Volatility Previous
GBP Gfk Consumer Confidence 2 -12
JPY Industrial Production 2 -1.5
JPY Industrial Production 2 2.3
AUD HIA New Home Sales 2 8.2
CHF UBS Consumption Indicator 2 1.34
EUR Unemployment Rate s.a. 3 6.1
EUR Unemployment Change 3 -7
EUR Unemployment 2 11.6
EUR Unemployment Rate 2 10.1
EUR Consumer Price Index 3 0.2
EUR Consumer Price Index – Core 3 0.9
USD ADP Employment Change 2 179
CAD Gross Domestic Product Annualized 2 2.4
CAD Gross Domestic Product 2 -0.6
USD Chicago Purchasing Managers’ Index 2 55.8
USD Pending Home Sales 2 1
USD Pending Home Sales 2 0.2

Government Bond Auctions

Date Time Country Auction

Aug 29 13:00 Norway Details of bond auction on Aug 31

Aug 30 11:10 Italy Holds bond auction

Aug 31 11:05 Norway Holds bond auction

Aug 31 11:30 Germany Eur 4bn Sep 2018 Schatz

Sep 01 10:30 Spain Holds bond auction

Sep 01 11:30 UK Jul 2022 Gilt

Sep 01 11:50 France Holds bond auction

 

 

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