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Copper Fundamental Forecast – September 7, 2016

By:
Barry Norman
Published: Sep 6, 2016, 13:35 UTC

Copper added 14 points to trade at 2.092 as the weaker dollar supported metals. The base metals seem to be split into various camps, copper prices are

Copper Fundamental Forecast – September 7, 2016

Copper added 14 points to trade at 2.092 as the weaker dollar supported metals. The base metals seem to be split into various camps, copper prices are under pressure on the back of the stock rises in LME–registered warehouses that have seen average daily stock inflow of 14,700 tonnes since August 19, compared with 3,196 tonnes per day in the first part of August. Aluminum prices are correcting sharply, but its earlier gains were hard to justify, zinc, lead and tin have all been driving higher, but not surprisingly are having to absorb some scale up selling, while nickel is recovering having corrected quite sharply after a very strong June to early August rally. As such, the underlying sentiment seems to remain firm, other than for those metals that are seeing identifiable bearish developments i.e. the stock inflow in copper.

Copper hovered above a two-month low on Tuesday as signs of a modest pickup in demand were countered by concerns of oversupply from a flood of inventory into exchange stockpiles.

Activity has begun to step up from the northern hemisphere summer lull, with physical traders in Asia reporting more enquiries across most metals, although little in the way of big volume business as yet.

Metals such as zinc, nickel and tin have outperformed, priming for a seasonal demand uptick late in the third quarter, but swelling supply is expected to pressure bellwether copper and aluminum.

But prices of the metal remained pinned near last week’s two-month low as a rise in inventories capped gains.

Physical traders say demand is marginally increasing as a summer lull comes to an end, though volumes remain muted. Inventories in London Metal Exchange warehouses swelled further, keeping the market under pressure, but there were signs that the impact of this was beginning to wane.

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Upcoming Economic Events that you should be monitoring:

 September 7, 2016

Cur. Event Actual Forecast Previous
  AUD GDP (QoQ) (Q2)   0.4% 1.1%
  AUD GDP (YoY) (Q2)   3.2% 3.1%
  GBP Halifax House Price Index (MoM) (Aug)   -0.4% -1.0%
  GBP Halifax House Price Index (YoY) (Aug)   7.0% 8.4%
  GBP Industrial Production (MoM) (Jul)   -0.3% 0.1%
  GBP Manufacturing Production (MoM) (Jul)   -0.4% -0.3%
  GBP NIESR GDP Estimate     0.3%
  USD JOLTs Job Openings (Jul)     5.624M
  CAD Interest Rate Decision     0.50%
  CAD Ivey PMI (Aug)     57.0
  USD Beige Book      

Government Bond Auctions

Date Time Country Auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction

 

 

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