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
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.
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Upcoming Economic Events that you should be monitoring:
Wednesday, June 1, 2016
Cur. | Event | Actual | Forecast | Previous | |||
CNY | Manufacturing PMI (May) | 50.0 | 50.1 | ||||
CNY | Non-Manufacturing PMI (May) | 53.5 | |||||
AUD | GDP (QoQ) (Q1) | 0.6% | 0.6% | ||||
AUD | GDP (YoY) (Q1) | 2.7% | 3.0% | ||||
CNY | Caixin Manufacturing PMI (May) | 49.3 | 49.4 | ||||
GBP | Nationwide HPI (YoY) (May) | 4.6% | 4.9% | ||||
GBP | Nationwide HPI (MoM) (May) | 0.2% | 0.2% | ||||
EUR | Manufacturing PMI (May) | 51.5 | 51.5 | ||||
GBP | Manufacturing PMI (May) | 49.6 | 49.2 | ||||
USD | Manufacturing PMI (May) | 50.5 | 50.5 | ||||
USD | ISM Manufacturing Employment | 49.8 | 49.2 | ||||
USD | ISM Manufacturing PMI (May) | 50.5 | 50.8 | ||||
NZD | GlobalDairyTrade Price Index | 2.6% | |||||
USD | Beige Book |
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