Copper Fundamental Forecast – September 6, 2016

Copper gained 9 points after Chinese services data printed better than forecast helping metals to rally today. The lower US dollar also supported prices. Copper held steady while lead and zinc hit year-to-date highs as the dollar fell after they key U.S. jobs report printed on a disappointing note weighing heavily on the US dollar.

The greenback was on the back foot after taking a tumble following a surprise contraction in U.S. manufacturing in August, casting some doubts on the strength of U.S. economic growth ahead of the closely-watched employment data later in the day.

Hedge funds and other large speculators held a net-short position, or bets on price declines, of 4,991 U.S. copper futures and options contracts in the week ended Aug. 23, according to Commodity Futures Trading Commission data released three days later. They switched from a net-long position, or wagers on a rally, of 2,237 a week earlier.

Stockpiles of the metal are ballooning, further pointing to a demand slowdown. Inventories monitored by the London Metal Exchange have jumped to a 10-month high. Supplies are likely moving out of China and into warehouses tracked by the London Metal Exchange, Commerzbank AG said in a report Aug. 24. The hoard underscores why money managers are betting on more price declines.

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Upcoming Economic Events that you should be monitoring:

 September 6, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond 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