Copper Fundamental Forecast – May 26, 2016

The reversal to the downside by the U.S. Dollar helped give July Comex High Grade Copper futures a boost on Wednesday. The lack of commodity fund selling also helped encourage aggressive short-covering. Copper closed in the early session at 2.1010, up 0.0345 or +1.67%.

The biggest influence on prices was the robust U.S. economy. Tuesday’s strong U.S. housing data supported the case for the Federal Reserve to raise interest rates in the near term, boosting the U.S. Dollar, however, the strength in the Greenback was not enough to stop the rally in copper.

The inability to break the market when the dollar strengthened encouraged shorts to book profits, putting further upside pressure on prices.

The current price action suggests the short-covering may continue over the near-term, but the rally is not expected to last because of the bearish supply/demand situation. Low demand from China is one of the reasons why fund traders are waiting for the best price to resume their shorting campaign. The selling could intensify if the Fed raises rates in June because this will support the U.S. Dollar. A stronger dollar is likely to curtail demand from foreign traders.

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, May 26, 2016

Government Bond Auctions

May 25 11:03 Sweden Sek 1bn 3.5% 2022 & Sek 3bn 1% 2026 bonds

May 25 11:05 Norway Holds bond auction

May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

May 25 19:00 US Holds 5Yr Notes Auction, 2Yr FRN

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero-coupon/BTPei auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

May 26 19:00 US Holds 7Yr Notes Auction

May 30 11:10 Italy Holds bond auction

Jun 01 10:30 Denmark Holds bond auction

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

Jun 01 11:30 UK 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 11:03 Sweden Holds I/L bond auction

Jun 02 11:50 France Holds bond auction