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Copper Fundamental Forecast – May 30, 2016

By:
Barry Norman

Copper soared up 15 points to 2.117 supported by positive data and a continued climb in housing data.  Copper prices hit two-week highs as stronger oil

Copper Fundamental Forecast – May 30, 2016

Copper soared up 15 points to 2.117 supported by positive data and a continued climb in housing data.  Copper prices hit two-week highs as stronger oil and a weaker US dollar triggered fund buying, but the rally is expected to fade on a poor outlook for demand growth in top consumer China. Some of the recent rise has been due to seasonally strong demand in China, which is likely to fade over coming months.

The weaker demand may have started in April and could be confirmed in May, starting with surveys of purchasing managers in the manufacturing sector, due on June 1.

Morgan Stanley analysts, travelling in China to talk to producers and others close to the market for insight into what is happening, said in a note the picture did not look too healthy for commodities.

A “hundred percent of the people we met with were looking for weaker conditions in the second half of 2016,” they said.

“After a demand pick up based on limited government debt fueled stimulus which triggered a major restock/speculation, production overtook demand in May.”

Reflecting the weak demand outlook in China are falling premiums for copper shipments to Shanghai on a cost, insurance and freight basis, which have fallen to $55 a tonne, the lowest since February 2013.

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.

copper

Upcoming Economic Events that you should be monitoring:

Monday, May 30, 2016

Cur. Event Actual Forecast Previous  
    United Kingdom – May Bank Holiday
    United States – Memorial Day
  JPY Retail Sales (YoY) (Apr)     -1.1%  
  AUD HIA New Home Sales (MoM) (Apr)     8.9%  
  AUD Company Gross Operating Profits     -2.8%  
  CAD Current Account (Q1)     -15.4B  
  CAD RMPI (MoM) (Apr)     4.5%

Government Bond Auctions

Date Time       Country           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

 

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