Copper Fundamental Forecast – June 1, 2016

Copper is down 16 points at 2.098 weighed down by the stronger US dollar. On Friday, Yellen was uncharacteristically hawkish during a debate at Harvard University echoing similarly aggressive comments by her colleagues on the Fed’s rate-setting committee, saying a rate rise during the summer months is probably appropriate.

Yellen’s comments caused a spike in government bond yields and boosted the dollar which usually move in the opposite direction of the gold price. Higher interest rates raise the opportunity costs of holding gold as the metal provides no yield and any gains for investors is through price appreciation.

Copper fell on Tuesday, on track for a more than 7 percent decline in May, the biggest monthly drop since November, on pressure from a resurgent dollar because of increasing expectations of a U.S. interest rate hike.

St. Louis Federal Reserve President James Bullard said on Monday in Seoul that global markets appear to be “well-prepared” for a summer interest rate hike by the Fed, although he did not specify a date for the policy move.

Bullard’s comments echoed remarks from U.S. central bank chief Janet Yellen said on Friday that rates may rise “in the coming months” if the economy picks up as expected and jobs continue to be generated.

The comments kept the dollar firm against its major counterparts, with further gains seen ahead of a rate hike expected in June or July. A stronger dollar makes greenback-denominated commodities more expensive for buyers paying with other currencies.

In other copper news, copper output in world No. 1 producer Chile fell in April as some mines in the central part of the country were hit by heavy rains and ore grades continued to decline, the government said on Monday.

FxEmpire provides in-depth analysis for each asset 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 up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Upcoming Economic Events that you should be monitoring:

Wednesday, June 1, 2016

Government Bond Auctions

Date Time       Country           Auction

May 30 11:10 Italy Eur 2-2.5bn 0.45% Jun 2021 BTP

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn 0% Apr 2021 Bobl

Jun 01 11:30 UK Gbp 2.75bn 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 10:50 France Eur 8-9bn 2.25% May 2024, 0.5% May 2026 & 3.25%

Jun 02 11:03 Sweden Sek 0.5bn 0.125% 2019 I/L & Sek 0.5bn 0.125% 2026 I/L bonds

Jun 06 13:00 Norway Details of bond auction on Jun 08

Jun 07 11:00 Netherlands Eur 4-6bn Jan 2022 DSL

Jun 07 11:00 Austria Holds bond auction

Jun 07 11:30 Germany Holds I/L bond auction

Jun 07 11:30 UK 4.5% 2046 Gilt

Jun 08 11:03 Sweden Holds bond auction

Jun 08 11:05 Norway Holds bond auction

Jun 08 11:30 Germany Eur 5bn Jun 2018 Schatz

Jun 08 17:20 Italy Announces details of bond auction

Jun 09 11:30 UK 0.125% 2036 I/L Gilt

Jun 09 17:20 Sweden Announces details of I/L auction on Jun 16