Copper Fundamental Forecast – June 23, 2016

September Comex High Grade Copper futures rose to its highest level in two weeks on Wednesday as safe-haven demand for the U.S. Dollar fell on hopes that Britain will vote to remain in the European Union. Gains were limited, however, as investors remain cautious despite recent polls suggesting the chances of the UK leaving the EU had fallen.

London prices also traded higher along with Shanghai Futures Exchange copper which ended the session up 1.6 percent at 36,260 Yuan ($5,504) a tonne. A drop in market open interest to its lowest level in nearly two months indicated massive short-covering had taken place.

The total net-long position of funds trading copper on the London Metal Exchange fell to 4,163 lots last Friday from a net-long position of 9.837 lots the previous week, the LME’s Commitments of Traders Report showed on Tuesday.

Copper’s outlook has been darkened by a surplus of supply, leading traders to their short positions, or bets that prices will fall. China, the world’s top producer of the refined metal shipped out a surfeit of metal at home. China exported 84,959 tonnes of copper in May, up by 256 percent from the same month last year.

“The (export) jump has largely been prompted by Chinese refiners shipping metal into the bonded warehouse network, which is in turn being exported in order to keep the domestic market tight amid rising domestic refined production, which has … supported the draw downs in ShFE copper inventories,” Citi said in a note.

The price action at Comex today is likely to be determined by the direction of the U.S. Dollar. A firmer dollar is likely to be bearish for copper prices. A weaker dollar should underpin prices. September Copper was last trading at $2.1165, up 0.0230 or +1.08%.

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.

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Thursday, June 23, 2016

Government Bond Auctions                                                   

Jun 22 11:03 Sweden Holds bond auction

Jun 22 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Jun 22 17:20 Italy Details of Zero-coupon/BTPei auction