Industrial and Base Metals Fundamental Analysis – August 11, 2015 – Forecast – Copper, Palladium & More

Analysis and Recommendations:

Copper added 9 points to trade at 2.342 as traders review Chinese Trade numbers along with a falling PPI. The hopes of additional stimulus are supporting the metals market today. Palladium is trading near the bottom of its lowest range at 597.60. Copper fell to a six-year low in London, approaching a bear market, after manufacturing weakened in China, the world’s largest metals user. Aluminum also slid to the lowest since 2009.

A private Chinese factory gauge released on Monday fell to a two-year low in July and an official index on Saturday slipped to the weakest in five months, adding to a near-$4 trillion rout in Chinese stocks and declining car sales that are threatening economic growth. The country uses about 40 percent of the world’s copper and half its aluminum. In the U.S., manufacturing cooled in July from the highest level in five months.

Copper hit a six-year low on Friday and zinc touched its weakest in two years, as gloomy sentiment about global growth and oversupply continued to weigh on the market.

While the main focus of investors has been the health of the economy in top metals consumer China, weak economic data released on Friday about European powerhouse Germany also added to the pressure on prices.

Government data released on Sunday showed that Chinese inflation for July rose 1.6%, above expectations for 1.5% and up from 1.4% in June.

The producer price index fell by a more-than-expected 5.4% last month, underling concerns over the health of the world’s second largest economy.

On Saturday, data showed that the country’s trade surplus narrowed to $43.0 billion last month from $46.5 billion in June, compared to estimates for a surplus of $53.3 billion.

Chinese exports slumped 8.3% from a year earlier, worse than forecasts for a decline of 1.0%, while imports dropped 8.1%, disappointing expectations for a drop of 8.0%.

A slowdown in domestic demand indicated a recovery in the broader economy remains fragile and may need further government stimulus.

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports.

This weekend and today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, August 11, 2015

Government Bond Auctions

Date Time Country

Aug 11 11:30 UK Auctions 0.125% 2058 I/L Gilt

Aug 12 11:30 Germany Eur 4bn Aug 2025 Bund

Aug 13 11:10 Italy Auctions BTPs/CCTeus

Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz

Aug 19 11:03 Sweden Holds bond auction

Aug 20 10:30 Spain Auctions Bonos/Obligaciones

Aug 20 11:30 UK Auctions 4.25% 2036 Gilt

Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug